CBN Rakes N181b from Treasury Bills Sale via Primary Market as Rates Rise

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Wednesday raised a total of N180.86 billion from the sale of treasury bills via the primary market.

The exercise received fair subscriptions from investors, especially the 364-day bill, which was oversubscribed.

Business Post reports that the stop rates the bills cleared yesterday were slightly higher than the previous primary market auction conducted by the apex bank.

A review of results of the exercise showed that the CBN raked N6.22 billion from the N6.22 billion worth of the 91-day bill offered to investors with the rate clearing at 10.20 percent against 10 percent in the last exercise.

For the N50 billion worth of the 182-day bill offered by the apex bank yesterday, it received subscriptions worth N53 billion from investors. However, the CBN sold N50 billion worth of the instrument at 10.50 percent.

Lastly, the central bank offered N124.64 billion worth of the 364-day bill to investors and received N191.67 billion worth of subscriptions, eventually selling N124.64 billion worth of the bill at 11.50 percent.

It was observed that yesterday, the T-bills market was generally flat, with yields compressing slightly by 0.02 percent.

The yields are expected to tick slightly higher today as the CBN is expected to intervene via an OMO T-bill auction to mop up excess liquidity from expected OMO maturities.

Meanwhile, the money market rates were flat yesterday with the overnight rate marginally up, closing at 15.67 percent against 15.50 percent recorded in the previous session.

For the Open Buy Back (OBB) rate, it remained unchanged at 15.17 percent yesterday as system liquidity declined slightly to about N130 billion long.

“We expect rates to decline slightly tomorrow, due to expected inflows from about N244 billion OMO T-bill maturities.

“This should however be moderated by an expected OMO auction sale by the CBN,” analysts at Zedcrest Research said.