N268.7bn Treasury Bills for Sale Wednesday, Rates to Move up

By Dipo Olowookere

On Wednesday, May 27, 2020, treasury bills worth N268.7 billion would be auctioned at the primary market.

During the exercise to be conducted by the Central Bank of Nigeria (CBN), the debt instruments would be offered to investors in three maturities.

According to the calendar for the sale, the apex bank, which is conducting auction for the Debt Management Office (DMO), the T-bills would have 91-day bills worth N41.26 billion, 182-day bills worth N107.63 billion and 364-day bills worth N119.85 billion.

Business Post reports that at the previous PMA, the central bank slightly increased the stop rates for the three-month and six-month instruments, while rate for the 12-month tenor was untouched.

At this week’s exercise, the CBN is expected to tinker with the rates to attract more investors to the market after the federal government increased its local borrowing due to the coronavirus pandemic, which made it almost impossible for external borrowing for the funding of the 2020 budget deficit.

During the week, the market will anticipate the maturity of N588.46 billion treasury bills via the primary and secondary markets.

Last week, activities in the money market were silent as there were zero OMO repayment and auction and amid the rare occurrence, NIBOR moderated for most tenor buckets.

According to Cowry Asset, NIBOR for 1 month, 3 months and 6 months tenor buckets fell to 5.68 percent from 6.94 percent, 6.04 percent from 7.02 percent and 6.65 percent from 7.54 percent respectively. However, overnight funds rose to 12.06 percent from 3.56 percent.

Meanwhile, NITTY moved in mixed directions across maturities tracked as yields on 1 month and 6 months maturities rose marginally to 2.05 percent from 1.94 percent and 2.59 percent from 2.55 percent respectively.

On the flip side, NITTY for 3 months and 12 months maturities declined marginally to 2.13 percent from 2.14 percent and 3.49 percent from 3.53 percent respectively.

Meanwhile, last Friday, the Open Buy Back (OBB) rate depreciated to 1.42 percent from 1.67 percent, while the Overnight (OVN) rate crashed to 2.00 percent from 2.17 percent.