One-Year Treasury Bills Rate Rises to 4.02%

T-bills stop rates

By Dipo Olowookere

Stop rate of one-year treasury bills was marginally raised by the Central Bank of Nigeria (CBN) at the primary market auction (PMA) on Wednesday, May 27, 2020.

The debt instrument, which was issued to investors two weeks ago at 3.84 percent, was allotted to subscribers yesterday at 4.02 percent.

Business Post observed that the tenor, though oversubscribed, did not receive the attention it used to have at the previous exercises. This may have contributed to the slight hike in the rates to keep it attractive to buyers.

At the PMA, the apex bank auctioned N19.8 billion worth of the 364-day bill and subscriptions valued at N38.0 billion were received, with the amount offered eventually allotted at 4.02 percent, higher than 3.84 percent of the previous PMA.

Despite increasing the stop rates for the 12-month T-bills, the central bank lowered the rates for the two other maturities.

At the PMA, the bank reduced the 91-day and 182-day bills to 2.45 percent and 2.72 percent respectively from 2.50 percent and 2.85 percent apiece.

Treasury bills worth N20.4 billion and N19.2 billion were auctioned on Wednesday for the three-month and six-month tenors respectively.

When the bids were analysed, investors staked the sum of N37.5 billion on the short-term instrument and a total of N55.2 billion on the mid-term tenor. But the central bank allotted what it offered for sale to subscribers at the exercise.

Meanwhile, at the secondary market yesterday, yields moved in different directions, with the one-month and the 12-month tenors moving up and the three-month and six-month going down.

Yield on the 12-month bill rose by 0.07 percent to 3.6 percent from 3.49 percent, while yield on the one-month bill increased by 0.01 percent to 2.06 percent from 2.05 percent.

For the three-month instrument, its yield depreciated by 0.11 percent to 2.02 percent from 2.13 percent, while yield on the six-month tenor decreased by 0.03 percent to 2.56 percent 2.59 percent.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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