N382b Inflows in Maturing T-Bills Likely to Weaken Rates

By Modupe Gbadeyanka

Treasury bills worth N381.5 billion will mature on Thursday via the secondary market, Business Post is reporting.

This inflow into the market is anticipated to boost liquidity, with the interbank rates likely to trend downwards, analysts at Cowry Asset said.

Last week, the Central Bank of Nigeria (CBN) auctioned treasury bills worth N152 billion in the primary market and amid elevated political uncertainty as well as the closeness of the election, investors demanded premium on fixed income assets.

This made the stop rates for the 91-day and 364-day auctioned T-bills to be raised by the apex bank to 11.00 percent from 10.90 percent and 15.00 percent from 14.50 percent respectively.

However, the stop rate for the 182-day maturity was flattish at 13.10 percent.

During the week, the apex bank also sold N574.59 billion in the secondary market and the total outflows of N726.59 billion partly offset the inflows from the matured T-bills worth N786.37 billion. The net inflow resulted in financial system liquidity ease.

Hence, NIBOR for overnight funds, one-month, 3 months and 6 months tenure buckets moderated to 16.96 percent from 21.88 percent, 14.42 percent from 15.55 percent, 13.01 percent from 13.81 percent and 14.86 percent from 15.52 percent respectively.

Meanwhile, NITTY fell for most maturities tracked amid renewed bullish activity. While yields on one-month, 6 months and 12 months fell to 13.97 percent from 14.91 percent, 13.88 percent from 14.63 percent and 17.18 percent from 17.32 percent respectively. But yield on the 3 months maturity rose to 11.81 percent from 11.30 percent.