One-Year T-Bills Rate Clears at 12.88% at CBN’s N150bn OMO Auction

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Thursday auctioned for sale treasury bills worth N150 billion to investors at the open market.

Business Post reports that the apex bank offered the debt instruments to traders in three maturities; 84-day, 175-day and 364-day bills.

A further breakdown showed that N20 billion worth of the three-month instrument was offered for sale, N30 billion worth of the six-month bill was auctioned, while N100 billion worth of the one-year instrument was offered to traders at the market yesterday.

However, subscriptions valued at N5.89 percent were received for the 84-day bill, but the CBN declared no sale at the end of the exercise.

For the 175-day instrument, the central bank got N3.73 billion worth of subscriptions, with N69 million allotted at 11.80 percent, lower than the 11.84 percent in the previous exercise.

However, the 364-day bill was slightly oversubscribed by traders by N6.27 billion, but the CBN sold only N87.97 billion, which cleared at 12.88 percent, higher 12.00 percent offered in the last exercise.

At the secondary market yesterday, yields increased by 0.38 percent on the back of the slightly improved system liquidity level in the money market.

Meanwhile, rates in the money market declined marginally by 2.07 percent as system liquidity was bolstered by inflows from N123 billion OMO T-bill maturities and refunds by the CBN for Unfilled Retail FX demand at the last auction.

Consequently, the Open Buy Back (OBB) rate dropped to 11.71 percent from 13.86 percent, while the Overnight (OVN) rate went down to 12.64 percent from 14.64 percent.

“We expect rates to inch slightly higher tomorrow, as banks fund for another retail FX auction by the CBN,” analysts at Zedcrest Research said.