CBN Raises 364-Day T-Bills Rate, Cuts 91-Day, 182-Day Rates

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Thursday conducted the first primary market auction for the month of May 2019.

During the exercise, the apex bank offered N109.71 billion worth of the debt instruments for sale to investors.

The auction was oversubscribed to by market players by N122.20 billion, with more of the offers on the short and long dated tenors.

However, the stop rates for the short and mid-dated maturities were reduced by the central bank, while the long-dated bill had its rate slightly increased.

At the last exercise in April 2019, the 91-day instrument cleared at 10.15 percent, the 182-day bill at 12.50 percent and the 364-day bill at 12.74 percent.

But yesterday, the 91-day bill cleared at 10.00 percent, the 182-day bill at 12.49 percent, and the 364-day bill clearing at 12.77 percent.

A breakdown of the auction indicated that of the N28.02 billion worth of the 91-day instrument offered for sale, subscriptions valued at N43.72 billion were received, while what was offered was eventually allotted.

Also, of the N43.52 billion worth of the 182-day bill auctioned, offers worth N29.85 billion were received, while N10.62 billion was allotted.

Lastly, of the N38.17 billion worth of the 364-day bill auctioned, subscriptions worth N157.63 billion were received, while N71.07 billion was sold to subscribers.

It was observed that the action of the CBN during the PMA caused the secondary market for treasury bills to close bullish. Average yields consequently compressed marginally by 0.05 percent.

But yields are anticipated to inch slightly higher on Friday (today) as market players look forward to a renewed OMO offering by the CBN due to the robust system liquidity levels.