Nigerian Treasury Bills Yield Drops, CBN Adjusts Spot Rates
The average yield on Nigerian Treasury bills (NTB) dropped to 22% as a result of increased secondary market demand. At the primary market, the interest rate on one-year bills was reduced by Apex Bank once more during the heavily subscribed Treasury Bill auction held last week
Spot rates at the short and belly sides of the curve were priced higher as the monetary authority continueds to seek balance as it sought to attract foreign portfolio investors into the market.
Meanwhile, the Nigerian Treasury bills secondary market rallied. Buying sentiment witnessed led to 18 basis points drop in the average T-bills yield to 22%. The buying momentum registered was driven by as unmet demand from the mid-week auction which later filtered into the secondary market.
In their separate market note, analysts said the average yield dipped by 19bps to 22.0% at the T-bills segment and contracted by 15bps to 20.8% at the OMO segment.
At the primary market auction conducted on Wednesday, the apex bank offered instruments worth N508.98 billion. The offer book split the amount into N331.01 billion for the 91D day bills at the short end, N9.30 billion for the 182day at the belly and N168.67 billion for the 365 day bills – to participants.
Cordros Capital Limited reported that the auction was hugely contested as the total subscription level settled higher at N1.59 trillion with more demand skewed towards the longer-dated bill which attracted N1.43 trillion – 90.1% of total subscription.
The auction closed with the CBN allotting instruments worth N638.98 billion. The breakdown showed that the CBN allotted N60.69 billion worth for the 91 day bills. The apex bank also sold 182 day bills worth N28.46 billion and N549.83 billion for the 365 day papers.
Auction results showed that stop rates on 91 day bills rose to 16.50% from 16.24%. Also, market priced 182 day bills at 17.45%, 45 basis points above previous rate of 17.00%. On the other hand, spot rate on 364 day bill dropped marginally to 20.69% from 20.70%.
#Nigerian Treasury Bills Yield Drops, CBN Adjusts Spot Rates # Naira Suffers Big, CBN Goes Ballistic Against FX Whales
