By Dipo Olowookere
Fresh treasury bills valued at N95.7 billion were sold to investors on Wednesday by the Central Bank of Nigeria (CBN).
The exercise, conducted via primary market auction, was largely successful as it was oversubscribed to by market players.
Of the N95.68 billion worth of the debt instrument auctioned at the exercise, offers worth N197.05 billion were received by the apex bank, which did the auctioning on behalf of the Nigerian government.
The bank auctioned N10 billion worth of the 91-day bill, but offers worth N20.09 billion were received, while N10 billion was eventually allotted.
The apex bank had also auctioned N17.60 billion worth of the 182-day bill, but received subscriptions worth N22.97 billion, with only N17.60 billion sold.
Of the N68.08 billion worth of the 364-day bill auctioned, the central bank received offers worth N153.99 billion, with N68.08 billion allotted.
Business Post reports that while the CBN slightly reduced the stop rate for the 91-day bill to 10.29 percent from 10.30 percent, rates for the two other maturities were increased.
The 182-day bill rate was raised from 12.20 percent to 12.60 percent, while the 364-day bill rate was increased from 12.35 percent to 12.85 percent.
It was observed that the focus on the primary market auction left the secondary market slightly bearish as a result of tight system liquidity levels.
Consequently, the average treasury bills yield advanced marginally by 0.003 percent at the end of the day’s trading to 12.86 percent.
Apart from the 3-month, 9-month and 12-month bills which went up by 0.06 percent, 0.11 percent and 0.06 percent respectively, the one-month and 6-month papers depreciated by 0.20 percent and 0.04 percent respectively.
Meanwhile, the average money market rate appreciated by 0.11 percent on Wednesday to finish at 17.11 percent. This was as a result of the 0.14 percent and 0.07 percent growth recorded by the Open Buy Back (OBB) and Overnight (OVN) rates respectively.
While the OBB rate closed at 16.71 percent from 16.57 percent, the OVN rate settle at 17.50 percent from 17.43 percent in the previous session.
Barring any significant sale of OMO bills on Thursday by the CBN, rates are anticipated to moderate slightly on the back of the expected inflows today via OMO maturities.
Adedapo Adesanya