30-Day T-Bills Yield Falls to 9.95% as CBN Mops up N201bn

By Dipo Olowookere

Yield on the one-month treasury bills at the secondary market settled at 9.95 percent on Thursday after depreciating by 0.79 percent.

Business Post reports that the 30-day debt instrument has lost 4.96 percent already this year. It was the only bill that suffered a yield decline yesterday.

The 90-day paper appreciated by 0.11 percent on Thursday to close at 11.07 percent, the 180-day instrument gained 0.13 percent to finish at 13.92 percent, the 270-day increased by 0.24 percent to end at 14.54 percent, while the 364-day bill rose by 0.01 percent to also settle at 14.54 percent.

At the close of business yesterday, the average treasury bills yields dropped by 0.06 percent to close at 12.80 percent.

At the market on Thursday, the Central Bank of Nigeria (CBN) drained system liquidity with a significant sale of OMO bills.

The apex bank sold N200.97 billion worth of the debt instrument to market players from the N150 billion worth of the OMO bills it auctioned.

Two maturities were offered to investors; the 203-day and 364-day bills with the stop rate maintained at 13.04 percent on the longer tenor, whilst that for the medium tenor was compressed by 0.05 percent to 12.95 percent.

The central bank auctioned N50 billion worth of the 203-day bill, but received subscriptions valued at N28.05 percent. The bank eventually allotted N24.56 billion.

For the 364-day note, the bank auctioned N100 billion, but received N187.91 billion and sold N176.41 billion.

Yields are expected to remain high in the secondary market as a result of relatively tight system liquidity level from the significant OMO sale yesterday and the anticipated retail FX funding for today.

Meanwhile, money market rates increased further yesterday by 3.18 percent to settle for the day at 20.29 percent due to the significant mop up by the apex bank.

Consequently, the Open Buy Back (OBB) and Overnight (OVN) rates rose by 3.00 percent and 3.36 percent respectively.

The OBB rate rose to 19.71 percent from 16.71 percent, while the OVN rate went up to 20.86 percent from 17.50 percent.