CBN Mops up N338b as One-Year T-Bills Clear at 13.50%

By Dipo Olowookere

The Central Bank of Nigeria (CBN) mopped up N337.6 billion from the system on Thursday through the sale of treasury bills via Open Market Operations (OMO).

During the exercise, the apex bank offered to investors the same bills it auctioned at the primary market auction (PMA) on Wednesday; 91-day, 182-day and the 364-day bills.

However, despite receiving offers worth N24 million for the N100 billion worth of the 91-day instrument auctioned, the apex bank issued a No Sale result.

But for the 182-day bill, the bank sold N31.05 billion after receiving subscriptions worth N38.05 billion of the N150 billion worth of the bill auctioned with the stop rate clearing at 12.50 percent.

For the 364-day bill, offers worth N383.39 billion were received by the apex bank from market players for the N300 billion auctioned. The bank eventually sold N306.55 billion worth of the instrument to investors. However, the rate cleared at 13.50 percent against 13.48 percent it cleared during the PMA held two days ago.

Generally, average yields of T-bills at the secondary market moderated further yesterday by 0.30 percent as investors continued to cherry-pick on attractive yields on the shorter end of the curve due to the significantly buoyant level of liquidity in the system.

Spreads tightened across the curve as the relatively high level of uncertainty in previous sessions ebbed as a result of the day’s OMO auction by the CBN.

“Barring a further OMO auction by the CBN, we expect yields to be relatively stable, due to the buoyant level of liquidity in the system.

“Market players are expected to prefer the longer end now above the short end of the curve,” Lagos-based Zedcrest Research said.

Meanwhile, Business Post reports that the average money market rate declined on Thursday by 0.79 percent to finish at 4.46 percent.

This occurred after the Open Buy Back went down by 0.58 percent to 4.17 percent from 4.75 percent, while the Overnight declined by 1 percent from 5.75 percent to 4.75 percent yesterday.

It was observed that the N218 billion inflows from OMO T-bill maturities yesterday helped offset outflows from the day’s N338 billion OMO auction sales.

This consequently sustained system liquidity at N560 billion positive, while the rates are expected to close the week on a calm note, barring a further OMO auction by the CBN today.