Rates to Remain High as CBN Sells N180bn T-Bills Today

By Dipo Olowookere

The Central Bank of Nigeria (CBN) will on Wednesday, September 18, 2019 (today) reissue maturing treasury bills worth N179.75 billion at the primary market auction.

Business Post reports that the apex bank would be offering the debt instrument to market players at the PMA in three maturities like it has done in the previous exercises.

According to Nigerian Treasury Bills Issue Programme for Fourth Quarter 2019 released by the bank some days ago, at the exercise, it would offer for sale N3 billion worth of the 91-day bill, N8.39 billion worth of the 182-day bill and N168.36 billion worth of the 364-day bill.

Analysts at Business Post expect the central bank to offer the debt instruments at attractive stop rates especially on the one-year treasury bill.

At the last exercise last Wednesday, the CBN raised the stop rates of the mid and long-dated bills and left stop rate for the short-dated instrument unchanged.

The central bank sold N15 billion worth of the 91-day bill at 11.10 percent, same as in the previous PMA on August 28, 2019; N14 billion worth of the 182-day bill at 11.80 percent, higher than 11.59 percent at the previous PMA; and N129.7 billion worth of the 364-day bill at 13.29 percent, higher than 12.89 percent at the previous exercise.

By our calculations, stop rates for the one-year tenor might be increased to between 13.35 percent to 13.40 percent at today’s exercise.

The secondary market for treasury bills is expected to be quiet today as investors focus on activities at the primary market.