Rates to Rise as CBN Sells N133.97bn Treasury Bills Today

By Dipo Olowookere

Treasury bills worth N133.97 billion would be offered to investors at the primary market on Wednesday, October 2, 2019 by the Central Bank of Nigeria (CBN).

Business Post reports that the stop rates are anticipated to marginally go up during the exercise as the apex bank plans to retain foreign portfolio investors in the market through attractive rates.

The bank would be rolling over the debt instruments in three maturities; 91-day, 182-day and 364-day bills, with N10.00 billion, N17.60 billion and N106.37 billion offered for the respective tenors.

Last week, the CBN sold T-bills valued at N302.42 billion through Open Market Operation (OMO) which partly offset the matured T-bills worth N422.05 billion.

As a result of this, the liquidity impact of net inflows worth N119.63 billion as well as the recently distributed N720.88 billion by the Federation Account Allocation Committee (FACC) accounted for the ease in the financial system liquidity.

Consequently, NIBOR for overnight funds, 1 month and 6 months tenure buckets moderated to 9.19 percent from 14.20 percent, 13.16 percent from 13.29 percent and 13.95 percent from 14.31 percent respectively.

However, NIBOR for 3 months tenure bucket increased to 13.69 percent from 13.44 percent.

Meanwhile, NITTY dipped for most maturities tracked as investors’ demand for treasury bills in the secondary market increased, with yields on the one month, 6 months and 12 months dwindled to 12.33 percent from 12.49 percent, 12.88 percent from 13.29 percent and 15.10 percent from 15.21 percent respectively; however, yield on 3 months maturity increased to 12.61 percent from 12.03 percent.