Interest Rate on 1-Year Treasury Bills Rises by 18bps
The Central Bank of Nigeria (CBN) hiked spot rate on one year treasury bills instrument sold to investors by 18 basis points at the primary market auction (PMA) last week. The latest uptick in spot rate is in contrast to pattern seen in the recent past with successive price down at the long dated treasury bills issuance.
In the secondary market, trading activities ended the week on bearish note, with notable sell pressures on the CBN-issued OMO bills, according to Cordros Capital. Early in the week, the treasury bills market exhibited mixed-to-bullish bias ahead of the auction, AIICO Capital Limited said, amidst positive system liquidity.
However, the course switched to a bearish theme following the sharp uptick in the stop rates at the Treasury bills auction. At the end of the auction conducted by Debt Management Office (DMO) on behalf of the CBN, instruments worth N284.26 billion were allotted to investors.
The amount was split into N28.15 billion for the 91-day sold at spot rate of 16.30%, the same rate as previously offered. The authority also sold N36.44 billion for the 182-day bill at 17.44%, the same rate offered at the previous auction. DMO sold N219.67 billion for the 365-day bills at 20.68%, 18 basis points above sot rate of 20.50% offered at previous auction.
In sum, the monetary authority allotted ₦284.26 billion, despite offering about ₦228.72 billion, with total bid/cover of 2.72x. The stop rate for the 91-Day and 182-Day papers remained unchanged at 16.30% and 17.44%, respectively, while the stop rate for the 364-Day paper increased by 18bps to 20.68%, compared to the previous auction.
Thereafter, market maintained a bearish bias, till the end of the week. Overall, the market settled on a bearish note, as average mid-rate increased by 47bps week-on-week to 20.47%. #Interest Rate on 1-Year Treasury Bills Rises by 18bps MTN Announces Construction of West Africa’s Largest Data Centre
