364-Day Treasury Bill Stop Rate Clears 1.19% Lower at Primary Market

January 13, 2023
364-day treasury bills

By Dipo Olowookere

The stop rate of the 364-day treasury bill was sold to investors at the primary market on Wednesday, 1.19 per cent lower than the rate of the previous session.

Business Post reports that the debt instrument, sold by the Central Bank of Nigeria (CBN) for the Nigerian government, cleared at 7.30 per cent as against 8.49 per cent in the preceding session.

It was observed that the apex bank pounced on the strong appetite for the asset class to review the rate down during the session. This action was witnessed across the other tenors offered for sale on Wednesday by the central bank.

The bank auctioned N53.9 billion worth of the one-year bill to traders but received bids valued at N310.4 billion and allotted N52.3 billion to subscribers.

From the analysis of the bid rates range, investors offered to purchase the maturity between 6.00 per cent and 16.00 per cent because of the high inflation rate in the country, but the CBN thought otherwise.

A look at the 182-day instrument showed that the central bank offered for sale N1.5 billion. However, it received subscriptions worth N56.2 billion, with N1.5 billion allotted at 4.33 per cent, 2.82 per cent lower than the 7.15 per cent it cleared at the last primary market auction.

As for the 91-day tenor, N1.6 billion was brought to the market on Wednesday for sale but offered worth N22.4 billion were received by the apex bank, and N3.2 billion was allotted to traders, who were drawn from various segments, including institutions like pension fund administrators (PFAs), high net worth individuals, among others.

This tenor had its stop rate cut down by 0.75 per cent during the session to 2.00 per cent from 2.75 per cent. The range of bid rates was between 2.00 per cent and 9.24 per cent.

A look at the exercise as a whole showed that the central bank went to the market with N57 billion worth of the instruments in three tenors but received bids valued at N389 billion, while  N57 billion was allotted at the end of the auction.

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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