By Dipo Olowookere
The further lowering of stop rates of treasury bills at the primary market continued today, Wednesday, December 11, 2019 when the Central Bank of Nigeria (CBN) auctioned N45 billion worth of the debt instruments to investors.
Results of the exercise obtained by Business Post showed that the T-bills were offered for as low as 5 percent by the central bank at today’s auction.
The apex bank offered for sale N5 billion worth of the 91-day instrument, N10 billion worth of the 182-day instrument and N30 billion worth of the 364-day instrument.
However, subscribers staked N53.9 billion on the three-month tenor, N46.3 billion on the six-month maturity and N192.4 billion on the one-year tenor, giving the total amount of subscriptions at N292.6 billion, N247.6 billion higher than the amount auctioned.
For the allotment, the CBN sold N1.8 billion worth of the 91-day bill, N4.5 billion worth of the 182-day bill and N38.7 billion of the 364-day bill.
For the stop rates, the 91-day instrument cleared at 5.00 percent, lower than 6.40 percent at the previous session; the 182-day tenor was sold at 6.19 percent, lower than 7.20 percent at the last PMA; while the 364-day maturity was allotted at 6.88 percent, lower than 9.37 percent.
This left the average rate at today’s exercise at 6.02 percent, lower than 7.66 percent of the previous primary market auction.
It is not certain how low the central bank would go in the cutting of treasury bills stop rates. Next week, another PMA would be conducted and observers believe that the rates might still go lower than today’s exercise before. They are of the opinion that a raise would definitely occur next year at a point in time.
Since the CBN stopped local investors from buying its own liquidity management tool, the OMO bills, it has significantly reduced stop rates of treasury bills at the primary, which is still open for the restricted groups to purchase. However, the OMO bills rates have remained at double digits; still as high at over 13 percent.
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