One-Year T-Bills Yield Jumps to 15.11% Monday

By Dipo Olowookere

The secondary market for the trading of treasury bills in Nigeria ended bearish on Monday as a result of a further liquidity squeeze from a wholesale foreign exchange sale by the Central Bank of Nigeria (CBN), which spurred selling interests at the market across the tenors.

Business Post observed that yesterday, the most selling interests were on the short end of the curve as reflected in the rise in the yield of the 3-month debt instrument, by 1.13 percent, the highest on Monday. The bill closed at 13.30 percent yesterday.

Yield on the one-month tenor appreciated on Monday by 0.69 percent to finish at 13.31 percent, the 6-month maturity increased by 0.77 percent to finish at 14.48 percent, while yield on the one-year tenor rose by 0.70 percent to settle at 15.11 percent.

At the close of business yesterday, the average yields of the treasury bills appreciated by 0.82 percent to settle at 14.05 percent.

According to analysts at Zedcrest Research, “The yields [are expected] to remain pressured across the curve as market players anticipate a renewed OMO auction by the CBN later in the week.”

Meanwhile, the average money market rates depreciated on Monday by 0.54 percent to finish at 9.36 percent.

This came on the back of the 0.43 percent decline posted by the Open Buy Back (OBB) rate and the 0.64 percent depreciation printed by the Overnight (OVN) rate.

At the close of transactions, the OBB rate dropped to 8.86 percent from 9.29 percent in the previous session, while the OVN rate fell to 9.86 percent from 10.50 percent.

With no significant funding pressures anticipated by traders at the market on Tuesday, the rates are expected to remain relatively stable.