CBN May Raise Rates at Today’s N34.38bn T-Bills Auction

By Dipo Olowookere

The Central Bank of Nigeria (CBN) will on Wednesday, August 14, 2019 (today) auction treasury bills worth N34.38 billion to investors.

During today’s exercise, the apex bank is expected to offer the debt instrument in three maturities; 91-day bills worth N4.38 billion, 182-day bills worth N10.00 billion and 364-day bills worth N20.00 billion.

According to analysts at Cowry Asset, “We expect their stop rates to increase as investors demand for higher rate due to declining crude oil prices.”

Tomorrow, treasury bills worth N49.04 billion would mature and the financial system is expected to be filled with liquidity and a resultant decline in NIBOR.

Last week, the apex bank sold treasury bills worth N114.59 billion via secondary market and the total outflows worth N114.59 billion which offset the inflows from the matured OMO-bills worth N83.37 billion led to the strain in financial system liquidity.

Hence, NIBOR rose for all tenor buckets: overnight fund rate, NIBOR for 1 month, 3 months and 6 months tenure buckets increased to 12.44 percent from 6.75 percent, 13.15 percent from 10.86 percent, 12.95 percent from 11.27 percent and 13.73 percent from 12.38 percent respectively.

Elsewhere, the Nigerian treasury bills true yield rose for all maturities tracked amid renewed bearish activity – yields on 1 month, 3 months, 6 months and 12 months maturities increased to 12.22 percent from 9.72 percent, 11.55 percent from 10.08 percent, 12.76 percent from 11.09 percent and 13.23 percent from 11.99 percent respectively.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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