By Modupe Gbadeyanka
The Central Bank of Nigeria (CBN) will this week resume the sale of treasury bills via the primary market auction (PMA). It would be the first PMA for the new year.
During the exercise to be conducted on Wednesday, January 2, 2019, the apex bank will offer to investors T-bills worth N74.83 billion.
Business Post gathered that the central bank will offer N10 billion worth of the 91-day bills, N20 billion worth of the 182-day bills and N44.84 billion worth of the 364-day bills.
However, it is not certain if the apex bank will raise the stop rates for the debt instruments or retain them at the present level.
The next day, T-bills worth N583.80 billion will mature via the primary and secondary markets which will more than offset the amount offered at the PMA.
Analysts at Cowry Asset said liquidity ease in the financial system is expected to be sustained with resultant moderation in interbank rates.
“Also, we expect stop rates to be flattish as CBN plans to refinance part of the maturing T-bills at the primary market,” it said.
Last week, the CBN auctioned T-bills worth N377.62 billion through the secondary market and the outflows partly offset the inflows from the matured T-bills worth N551.36 billion.
The net inflow chiefly contributed to the financial system liquidity ease; hence, NIBOR for overnight funds and 1 month tenure buckets moderated to 19.00 percent from 25.93 percent and 15.75 percent from 15.86 percent respectively.
However, NIBOR for 3 months and 6 months tenure buckets rose to 15.18 percent from 14.31 percent and 14.80 percent from 14.53 percent respectively. Meanwhile, NITTY fell for most maturities tracked as investor’s interest in short term instrument was sustained: yields on 1 month, 6 months and 12 months moderated to 14.95 percent from 15.27 percent, 13.46 percent from 13.93 percent and 17.31 percent from 17.42 percent respectively; however, yield on 3 months rose to 14.49 percent from 13.48 percent.
