CBN Allots N180bn T-Bills to Investors, Slices Stop Rate

September 19, 2019
one-year t-bills

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Wednesday sold treasury bills worth about N180 billion to investors at the primary market despite receiving offers worth more than it auctioned.

The apex bank went to the market yesterday with a total of N179.75 billion T-bills auctioned in three maturities, but subscriptions valued at N376.78 billion were received.

Business Post observed that during the exercise, investors were more interested in the longer tenor than others and it got the most subscriptions.

At the PMA, the bank auctioned N3 billion worth of the 91-day bill, N8.39 billion worth of the 182-day bill and N168.36 billion worth of the 364-day bill.

However, it received subscriptions worth N4.46 billion for the 91-day debt instrument, N12.36 billion for the 182-day maturity and N359.96 billion for the 364-day tenor.

At the end of the day, when the CBN announced results of the exercise, it allotted N3 billion worth of the 91-day bill, N8.39 billion worth of the 182-day bill and N168.36 billion worth of the 364-day bill.

However, it maintained the stop rate of the 91-day instrument at 11.10 percent, while it reduced the 182-day tenor by 0.05 percent to 11.75 percent, with the stop rate for the one-year instrument marginally increased by 0.01 percent to 13.30 percent.

A look at the secondary market yesterday showed that yields increased for most of the maturities on the back of renewed selling pressure.

Business Post reports that the average yields of T-bills at the market increased on Wednesday by 0.06 percent to settle at 13.03 percent. Apart from the six-month tenor which depreciated by 0.02 percent to close 13.00 percent from 13.02 percent, every other maturity ended green.

The one-month bill rose by 0.04 percent to finish at 12.25 percent from 12.21 percent, the three-month instrument gained 0.08 percent to settle at 11.57 percent from 11.45 percent, while the one-year bill appreciated by 0.14 percent to close at 15.29 percent from 15.15 percent.

Looking at the money market, rates depreciated yesterday by 2.57 percent as the apex bank auctioned N180 billion treasury bills at the primary. The average rates consequently dropped to 15.07 percent.

A further analysis showed that the Open Buy Back (OBB) rate suffered a loss of 2.43 percent to close at 14.57 percent, while the Overnight (OVN) rate dropped 2.71 percent to finish at 15.57 percent.

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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