By Dipo Olowookere
As predicted, stop rates of treasury bills at the primary market auction on Wednesday were lowered by the Central Bank of Nigeria (CBN).
During yesterday’s exercise, the apex bank rolled over a total of N88.9 billion in maturing treasury bills across three maturities.
Business Post reports that N10 billion worth of the 91-day bill, N20 billion worth of the 182-day bill and N58.86 billion worth of the 364-day bill were auctioned.
However, results of the subscriptions showed that investors staked N10.23 billion on the short tenor instrument, N64.18 billion on the medium tenor instrument and N315.77 billion on the long tenor instrument.
At the close of the exercise, the CBN allotted N10 billion to the 91-day bill, N20 billion on the 182-day bill and N58.86 billion on the 364-day bill.
For the stop rate, the 91-day instrument went up to 10.50 percent from 9.60 percent, the 182-day instrument went down to 11.70 percent from 11.89 percent, while the 364-day instrument crashed to 11.91 percent from 12.02 percent.
Meanwhile, rates in the money market depreciated further by 3.25 percent yesterday as a result of the relatively high system liquidity.
This left the average rate closing at 3.65 percent due to the 3.29 percent loss by the Open Buy Back (OBB) rate and the 3.21 percent decline by the Overnight (OVN) rate.
At the close of business, the OBB rate dropped to 3.29 percent from 6.57 percent, while the OVN rate fell to 4.00 percent from 7.21 percent.
In anticipation of another OMO auction by the central bank to manage excess system liquidity, rates are expected to move slightly higher on Thursday.
