By Modupe Gbadeyanka
This week, the Central Bank of Nigeria (CBN) will conduct the sale of treasury bills to investors at the primary market. This exercise is expected to take place this Wednesday and it would be the first for the month of July 2019.
The apex bank offered treasury bills worth N17.61 billion to market players, but during this week’s edition, T-bills worth N143.96 billion would be auctioned at the market.
Business Post reports that during the exercise, stop rates for the 91-day bill cleared at 9.60 percent, the 182-day tenor at 11.89 percent and the 364-day maturity at 12.02 percent.
At this week’s auction, analysts at Cowry Asset are predicting that the rates would be slightly raised by the central bank.
“We expect their stop rates to increase marginally, given the closeness of the rates to inflation rate (which is presently at 11.40 percent),” they said.
A breakdown of the scheduled PMA showed that the CBN will sell N20.09 billion worth of the 91-day bill, N24.51 billion worth of the 182-day bill and N99.36 billion worth of the 364-day bill.
Cowry Asset also said this week, it expects “NIBOR to fall amid maturing N188.64 billion T-bills and increased liquidity from FAAC recent inflows.”
Last week, in the absence of auctions by CBN both in the primary and secondary markets, interbank rates moderated amid renewed ease in financial system liquidity as bills worth N16.37 billion matured in Open Market Operations (OMO) and as N679.69 billion was disbursed by Federation Accounts Allocation Committee (FAAC).
Consequently, overnight funds, NIBOR for 1 month, 3 months and 6 months tenure buckets moderated to 5.00 percent from 9.79 percent, 11.62 percent from 12.21 percent, 12.63 percent from 12.69 percent and 13.54 percent from 14.23 percent respectively.
Elsewhere, NITTY contracted for most maturities tracked amid renewed demand pressure – yields
on 1 month, 6 months and 12 months maturities fell to 10.42 percent from 11.03 percent, 12.52 percent from 12.65 percent and 13.33 percent from 13.67%) respectively. However, NITTY for 3 months increased to 11.63 percent from 11.05 percent.
