30-Day T-Bills Yield Drops to 11.56% as CBN Sells OMO Bills

September 10, 2019
30-Day T-Bills Yield Drops to 11.56% as CBN Sells OMO Bills

By Dipo Olowookere

Transactions at the secondary market for treasury bills in Nigeria closed bullish on Monday, with the corresponding yields declining across the maturity buckets tracked.

Business Post observed that the tenors came under immense pressure during the trading session as the Central Bank of Nigeria (CBN) mopped up N183.6 billion from the system through the sale of OMO bills yesterday.

At the close of business, yield on the one-month treasury bills depreciated by 0.96 percent to 11.56 percent from 12.52 percent, the 3-month instrument fell by 0.90 percent to 12.12 percent from 13.02 percent, the 6-month tenor went down by 0.53 percent to 12.62 percent from 13.15 percent, while the 12-month maturity declined by 0.10 percent to 15.01 percent from 15.11 percent.

This left the average yields of the treasury bills settling at 12.83 percent after a decline of 0.62 percent.

As earlier stated, the apex bank floated an OMO auction yesterday and N150 billion worth of the debt instrument was offered for sale to investors in three tenors; 80-day, 185-day and 364-day.

Business Post reports that N20 billion worth of the short-dated bill, N30 billion worth of the mid-dated bill and N100 billion worth of the long-dated bill were auctioned during the exercise.

However, market players staked N5.14 billion on 84-day bill, N13.89 billion on the 185-day bill and N211.36 billion on the 364-day bill, with the CBN allotting N150 million for the 84-day tenor at 11.59 percent, N2.13 billion for the 185-day maturity at 11.79 percent and N181.36 billion for the 364-day instrument at 13.50 percent.

Meanwhile, at the money market on Monday, the average rates rose following funding pressures from forex and OMO auctions, which caused a dip in system liquidity.

The Open Buy-Back (OBB) rate increased by 3.93 percent to close at 7.14 percent from 3.21 percent, while the Overnight (OVN) rate appreciated by 4.46 percent to 8.31 percent from 3.86 percent last Friday as system liquidity remained well in positive territory at N161.2 billion.

“We expect rates to oscillate in tandem with system liquidity, as we anticipate another OMO auction by the CBN to mop up OMO maturities of at least N348 billion later in the week,” Zedcrest Research said.

Dipo Olowookere

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 [email protected]

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