Rates to Fall as N196bn Treasury Bills Mature This Week

By Modupe Gbadeyanka

There are strong indications that interbank interest rates will decline this week on anticipated ease in financial system liquidity.

This is anticipated to happen in the fixed money market as the Central Bank of Nigeria (CBN) will retire treasury bills worth N196.41 billion on Thursday.

Last week, the apex bank auctioned treasury bills worth N109.71 billion via the primary market and in line with expectation, stop rates for 90-day and 182-day bills moderated to 10.00 percent from 10.15 percent and 12.49 percent from 12.50 percent respectively amid investors’ high preference for short term fixed income securities.

However, stop rate for 364-day bills increased marginally to 12.77 percent from 12.74 percent, analysts at Cowry Asset said.

Hence, the total outflows worth N109.71 billion partly offset the total matured bills worth N172.51 billion in the week.

Amid financial system liquidity ease, NIBOR moderated for all tenure buckets: NIBOR for overnight funds rate, 1 month, 3 months and 6 months tenure buckets moderated to 5.25 percent from 16.81 percent, 11.84 percent from 11.97 percent, 11.88 percent from 12.22 percent and 14.31 percent from 14.43 percent respectively.

Meanwhile, NITTY fell for most maturities tracked amid renewed bullish activity – yields on 1 month, 3 months and 6 months declined to 10.84 percent from 11.09 percent, 10.73 percent from 11.16 percent and 13.27 percent from 13.42 percent respectively.

However, 12 months maturities rose to 14.49 percent from 14.20 percent.