CBN Cuts Treasury Bills Stop Rates at Primary Market

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Wednesday conducted the second sale of treasury bills at the primary market in the month of April 2019.

During the primary market auction (PMA) yesterday, the apex bank offered the debt instrument to investors in three maturities as usual.

However, the stop rates were reduced by the central bank across the three tenors.

T-bills worth N58.50 billion were auctioned at the exercise with subscriptions valued at N223.62 billion received.

Results of the auction showed that of the N5.85 billion worth of 91-day bill, offers valued at N23.97 billion were received and N5.85 billion alloted.

For the 182-day bill, the apex bank auctioned N29.25 billion, but subscriptions worth N37.69 billion were received, with N3.50 billion allotted.

Of the N23.40 billion worth of the 364-day bill, the central received offers valued at N161.96 billion, but only N49.14 billion was given to investors.

Business Post reports that stop rates for the 91-day bill was dropped to 10.15 percent from 10.29 percent, the 182-day bill was reduced to 12.50 percent from 12.60 percent, while the 364-day bill was cut to 12.74 percent from 12.85 percent.

At the secondary market on Wednesday, T-bills yields closed slightly lower by 0.07 percent on the back of some demand in anticipation of lower clearing rates at the NTB auction.

However, yields are expected to trend slightly higher as market players anticipate an OMO auction due to the N107 billion OMO T-bills maturing today.

Meanwhile, rates in the money market remained relatively unchanged as system liquidity remained in negative territory at N48 billion opening the day.

The Open Buy Back (OBB) and Overnight (OVN) rates consequently ended the session at 15.71 percent and 16.57 percent respectively.

“We expect rates to moderate slightly on Thursday due to expected inflows from OMO maturities. This is however barring a significant OMO sale by the CBN,” Zedcrest Research said.