One-Year T-Bills Yield Rises to 13.09% on Thursday

By Dipo Olowookere

The treasury bills market traded significantly bearish on Thursday as average yields on the debt instrument rose by 0.55 percent at the close of transactions.

It was observed that the spike in the yields, which closed at 11.93 percent yesterday, was caused by renewed selloffs by offshore investors across the curve.

In addition, local market players also remained risk off following the renewed OMO issuance by the Central Bank of Nigeria (CBN) on Wednesday.

Business Post reports that the three-month bill recorded the highest hike in yield, rising by 0.87 percent to settle at 11.22 percent.

Following were the six-month instrument, which increased by 0.82 percent to close at 12.44 percent, the one-year tenor rose by 0.42 percent to end at 13.09 percent, while the one-month maturity appreciated by 0.03 percent to finish at 10.95 percent.

“We expect yields to remain slightly pressured in the near term, due to continued selloffs by offshores and the relatively tighter system liquidity levels occasioned by the CBN’s continued forex interventions in the I&E market,” Zedcrest Research said in its report yesterday.

Meanwhile, rates in the money market inched higher by 2.61 percent yesterday to finish at 12 percent despite the N109 billion inflows from maturing OMO bills.

This was majorly due to a decline in system liquidity from the continued FX interventions by the CBN.

With system liquidity currently estimated at N60 billion long, the Open Buy Back (OBB) rate rose to 11.43 percent from 9.00 percent, while the Overnight (OVN) increased to 12.57 percent from 9.79 percent.

The rates are expected to remain at current double digit levels, due to the relatively tighter system liquidity levels at the market.