Interest Rate on Nigerian Treasury Bills Rises to 20.65%
The interest rate offered to investors at the just concluded primary market auction (PMA) conducted by the Debt Management Office (DMO) on behalf of the monetary authority increased at the long end of the curve to 20.65%, traders said.
The DMO successfully rolled over N374.67 billion in maturing bills at the primary market auction on Wednesday. Demand was noted to be stronger than anticipated despite tight liquidity in the financial markets.
The 364-day Treasury Bills saw significant oversubscription, with a total of N460.4 billion out of the N349.54 billion offered. The stop rate increase from 19.86% to 20.65%.
At the auction, the 91-day and 182-day Treasury Bills maintained their stop rates at 17.00% and 17.50%, respectively, Alpha Morgan Capital Limited told investors, with no changes from the previous rates for these tenors. The investment firm told investors that there was oversubscription for the 91-day and 182-day T-bill. The total offer was allotted for the respective tenor.
For 91-day bills, DMO offered N13.14 billion for sales to investors. However, the short dated instrument received N16.85 billion in demand while the authority sold the amount offered. For 182-day bills, the DMO offered to sell N11.99 billion to investors, but demand came in at N12.58 while the authority allotted N9.36 billion worth of bills to investors.
The debt office offered to sell 364-day bills worth N349.54 billion at the primary market auction but the fixed interest security asset was oversubscribed as investors staked N460.4 billion on it. The DMO sold one year bills worth N352.17 billion.
Meanwhile, the Treasury bills secondary market traded with bullish sentiments, as the average yield contracted by 4 basis points to 24.1% on Wednesday amidst the primary market auction.
In its market update, Cordros Capital Limited said across the curve, the average yield declined at the short (-4bps), mid (-5bps), and long (-3bps) segments. The yield contraction was driven by demand for the 65-day to maturity (-15bps), 170-day to maturity (-54bps), and 212-day to maturity (-17bps) bills, respectively.
Conversely, the average yield expanded by 59 basis points to 26.4% in the OMO bill segment. #Interest Rate on Nigerian Treasury Bills Rises to 20.65%FX Stability: CBN Sells 122.671m Dollars to 46 Authorised Dealers
