By Dipo Olowookere
Yesterday, the Central Bank of Nigeria (CBN) carried out its second primary market auction (PMA) of treasury bills with the exercise recording an oversubscription by 105 percent.
Much of the subscriptions came from the 364-day bill, with a total subscription worth N396.85 billion received from the N193 billion offered by the apex bank.
However, at the close of the auctioning, the central bank allotted N193 billion worth of the 1-year instrument to investors at 13.79 percent, lower than the 14.3 percent it cleared at the last exercise held on January 3, 2018.
Business Post reports that the stop rates for other tenors also dropped at the exercise on Wednesday, though slight oversubscriptions were recorded for the two bills.
For the 91-day bill, the central bank raised N10.25 billion, same amount it offered, but received N44.73 billion worth of subscriptions from traders. However, the rate cleared at 12.10 percent in contrast to 12.55 percent it was at the last PMA.
Also, the apex bank allotted N26.60 billion worth of the 182-day bill after receiving N29.91 billion worth of subscriptions from investors. The amount of the instrument offered for sale by the CBN was N29.60 billion and it cleared at 13.75 percent, lower than 13.93 percent from the last exercise held two weeks ago.
Meanwhile, the money market rates marginally declined on Wednesday as the market looked forward to the N96 billion maturing OMO bills today and N65 billion 2034 bond coupon payment.
At the close of business yesterday, the overnight rate went down to 6.50 percent from 8.50 percent the previous day, while the open buy back (OBB) rate slowed to 6.17 percent from 7.50 percent on Tuesday.
The rates are further expected to drop today as a result of the inflows being anticipated by market players as well as OMO T-bills sale by the central bank.
