Traders Anticipate Higher Rates as CBN Sells N191bn T-Bills Today

By Dipo Olowookere

Another sale of treasury bills will take place on Wednesday, October 12, 2022, and traders will expect the Central Bank of Nigeria to raise the stop rates again like it did in the preceding exercise.

Two weeks ago, the apex bank increased the stop rates for the three maturities of T-bills it sold at the primary market auction due to a higher inflation rate and monetary policy rate (MPR).

The National Bureau of Statistics (NBS) disclosed last month that inflation in August 2022 rose by 20.52 per cent, and in September, the CBN increased the MPR to 15.5 per cent from 14.0 per cent.

The Governor of the bank, Mr Godwin Emefiele, explained to newsmen that the hike in the interest rate was to tame rising inflation. This week, the NBS is expected to inform Nigerians of the inflation rate for September, and there are projections that it could get closer to 21 per cent.

With this in mind, treasury bills investors will expect the CBN to further increase the stop rates for the debt instrument to sustain the high appetite for them.

At the last PMA, the central bank raised the 91-day bill by 0.99 per cent to 6.49 per cent, the 182-day bill was increased by 1.50 per cent to 7.45 per cent, and the 364-day bill was jerked higher by 2.25 per cent to 12.00 per cent.

Today, the bank is going to the market with N191 billion worth of the instruments in the same three tenors of 91 days, 182 days and 364 days.

The apex bank plans to sell N4.3 billion worth of the three-month instrument, N10.6 billion worth of the six-month instrument, and N176.1 billion worth of the 12-month instrument.

Already, analysts are predicting that the central bank will marginally increase the rates, with the one-year bill expected to be near 13 per cent.