Treasury Bills Yields Rise Ahead of Wednesday’s Primary Auction

By Dipo Olowookere

The average yields of treasury bills at the secondary market increased on Tuesday amid renewed bearish activity of investors at the market, Business Post is reporting.

For the most tenors of the debt instrument monitored during the trading session, yields faced north as market players prepare for the sale of T-bills today by the Central Bank of Nigeria (CBN).

During today’s primary market auction, the central bank would sell treasury bills valued at N122 billion in the usual three tenor. The bank said it would sell N5.85 billion worth of the 91-day bills, N3.50 billion worth of the 182-day bills and N112.54 billion worth of the 364-day bills.

There are strong expectations that the stop rates would be slightly lowered by the apex bank at the exercise, especially on the one-year tenor, which has had huge interest from market players.

At the secondary market yesterday, Business Post observed that yields rose across the four maturities tracked, with the longer end of the curve recording the highest.

Yield on the one-year bill rose by 0.24 percent to 14.35 percent from 14.11 percent, yield on the 30-day instrument increased by 0.16 percent to 11.13 percent from 10.98 percent, yield on the 90-day tenor appreciated by 0.11 percent to 11.85 percent from 11.74 percent, while yield on the 180-day bill jumped by 0.07 percent to 12.34 percent from 12.27 percent.

Consequently, the average yields of T-bills increased yesterday at the close of transactions by 0.15 percent to settle at 12.42 percent.

Meanwhile, transactions at the money market closed negative on Tuesday with the average rates crashing by 7.61 percent to 8.79 percent.

This followed the 7.57 percent decline suffered by the Open Buy Back (OBB) rate and the 7.65 percent depreciation recorded by the Overnight (OVN) rate.

At the close of business, while the OBB rate dropped to 8.43 percent from 16.00 percent of the previous session, the OVN rate crashed to 9.14 percent from 16.79 percent recorded on Monday.

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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