By Dipo Olowookere
The Central Bank of Nigeria (CBN) on Wednesday further reduced the stop rates of treasury bills in the country at the primary market in a bid to discourage the tying down of liquidity on government instrument at the detriment of the real sector of the economy, which desperately need funds for economic growth.
Since the apex bank announced restricting local investors from participating in the Open Market Operations (OMO), the stop rates of T-bills, which remains open to them, have been on the downward trend.
Despite the continuous cut in the rates, the appetite of investors for the investment tool has not waned as witnessed at Wednesday’s primary market auction (PMA).
At today’s exercise, the apex bank took the federal government’s debt instrument worth N150.6 billion to the market in three tenor, but received subscriptions valued at N533.9 billion from market participants.
The CBN auctioned 91-day bill worth N24.37 billion, 182-day bill worth N23.16 billion and 364-day bill worth N103.07 billion, but when the results came out, investors staked N106.9 billion on the 91-day maturity, N107.6 billion on the 182-day tenor and N319.4 billion on the 364-day instrument.
Business Post reports that for the allotment, the central bank, which conducted the exercise on behalf of the Debt Management Office (DMO) for government, sold N20.4 billion of the 91-day bill, N19.2 billion of the 182-day bill and N111.1 billion of the 364-day bill.
For the stop rates, the three-month maturity cleared at 6.50 percent, lower than 7.80 percent at the previous PMA; the six-month tenor cleared at 7.23 percent, lower than 9.00 percent at the last exercise; while the one-year instrument cleared at 8.37 percent, lower than 10.00 percent at the earlier auction held two weeks ago.
Business Post reports that on the average, the stop rates of the treasury bills issued today depreciated to 7.37 percent from 8.93 percent. The previous rates were crashed from 10.48 percent.
