By Dipo Olowookere
In line with expectations, the Central Bank of Nigeria (CBN) increased stop rates of the treasury bills at the primary market auction (PMA) on Wednesday.
The apex bank raised the rates for the short and long ends of the curve during the exercise, which was largely subscribed to.
While the central bank upwardly reviewed the 91-day bill higher by 0.10 percent, the 12-month paper was tuned up by 0.50 percent, with the 182-day note left unchanged.
Consequently, the stop rate for the short-dated maturity settled at 11.00 percent, the mid at 13.10 percent and the long tenor cleared at 15.00 percent.
Business Post observed that at the PMA yesterday, there were strong demands for the short and mid-dated tenors as they were hugely oversubscribed.
Of the N5.85 billion worth of the 91-day bill auctioned for sale by the bank, offers worth N17.55 billion were received with N5.85 billion allotted.
Also, for the 182-day note, the CBN offered for sale N26.60 billion, but subscriptions valued at N35.67 billion were received, with the amount auctioned eventually allotted to investors.
Finally, of the N193 billion paper auctioned, market players bombarded the apex bank with N200.39 billion worth of subscriptions, but the bank agreed to sell only N119.59 billion.
Today, there are expectations that the central bank will conduct an OMO sale and will likely tamper with the rates.
Meanwhile, at the money market yesterday, the average rate moderated by 3.96 percent to settle at 18.96 percent. This followed the 3.50 percent and 4.42 percent decline by the Open Buy Back (OBB) and the Overnight (OVN) rates to close at 18.17 percent and 19.75 percent respectively.
