By Dipo Olowookere
The Central Bank of Nigeria (CBN) crashed the average stop rates of treasury bills at the primary market a single-digit; to 8.93 percent from 10.48 percent, Business Post can report.
As anticipated, the exercise was oversubscribed to as investors staked a total of N555.98 billion on the N125 billion T-bills brought to the market by the apex bank.
The central bank had offered to sell to investors N4.38 billion worth of the 91-day bill, N12.92 billion worth of the 182-day bill and N107.94 billion worth of the 364-day bill.
However, when the subscriptions were analysed, the bank had N58.43 billion staked on the three-month instrument, N57.85 billion on the six-month instrument and N439.70 billion on the 12-month tenor.
At the end of the exercise, the CBN allotted N4.38 billion worth of the 91-day bill at 7.80 percent, N12.92 billion worth of the 182-day bill at 9.00 percent and N107.94 billion worth of the 364-day bill at 10.00 percent.
When compared with the previous session held on October 30, 2019, stop rate of the 91-day bill dropped from 9.50 percent, the 182-day bill from 10.45 percent and the 364-day bill from 11.50 percent.
Business Post reports that if the demand for treasury bills continue, the stop rates would further be lowered by the central bank at the next exercise fixed for November 27, 2019.
As stated in our earlier report, investors will continue to look at the primary market for treasury bills as a result of the recent directive of the CBN on the sale of its OMO bills (READ IT HERE). This will continue to drive the rates lower until there is an inevitable need for another hike to trap investors.
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