By Modupe Gbadeyanka
There are strong expectations that the Central Bank of Nigeria (CBN) will likely lift stop rates of treasury bills this week to further slowdown foreign portfolio outflows.
This Wednesday, the apex bank will auction the debt instruments worth N150.60 billion via the primary market.
During the exercise, the central bank will offer N22.73 billion worth of the 91-day bills, N24.80 billion worth of the 182-day bills, and N10.07 billion worth of the 364-day bills.
The next day after the primary market auction, treasury bills worth N594.36 billion will mature via the primary and secondary markets.
As a result of these two exercises, there is anticipated to be liquidity ease in the financial system, which should be sustained with resultant moderation in interbank rates.
According to analysts at Business Post, the CBN will likely raise the stop rates for the 91-day and 182-day bills to attract more subscriptions, while keeping the one-year bills rate at the present level or even slightly lower it.
For analysts at Afrinvest, “We expect money market rates to remain within the single digit band as liquidity levels remain robust. Nevertheless, we expect the CBN to sustain its weekly OMO mop ups in the week.”
Last week, according to analysts at Cowry Asset, the CBN sold treasury bills worth N199.60 billion in the secondary market.
The total outflows were offset by the inflows from the matured T-bills worth N397.72 billion. Consequently, NIBOR moderated for all the tenor buckets tracked as the financial system was awashed with liquidity, in line with expectation: NIBOR for overnight funds, 1 month, 3 months and 6 months moderated to 6.29 percent from 7.00 percent, 12.09 percent from 12.12 percent, 13.88 percent from 14.27 percent and 14.44 percent from 14.85 percent respectively.
Meanwhile, NITTY moved in different directions across maturities tracked: yields on 1 month and 3 months maturities increased to 11.52 percent from 10.95 percent and 13.41 percent from 13.30 percent respectively.
However, yields for 6 months and 12 months maturities moderated to 13.66 percent from 13.68 percent and
16.73 percent from 16.82 percent respectively.
