Rates on Nigerian Treasury Bills Crash
At the Central Bank of Nigeria (CBN) primary market auction conducted on Wednesday, spot rates on long-dated instruments were priced down while market participants saw the return on the short end pushed upward.
The decline was in contrast to the market experienced in the previous auction amidst inflation, interest, and naira worries. In the secondary market, trading activities on bills were muted as local investors packed their bids into CBN auctions.
According to primary market auction results, demand came strong across all tenors on offer while bid-to- the cover ratio printed at 8.3 times due to somehow sufficient liquidity levels. In the secondary market, the average yield was unchanged at 6.3%.
TrustBanc Capital Limited said in a report that the stop rates on 182-day and 364-day bills were allotted at 8.24% and 5.12%, a 121 and 88 basis points decline when compared to the previous stop rates.
However, the 91-day bill saw a 41 basis points jump in rates to 4.89%. In the money market, the Nigerian Inter-Bank Offered Rate rose across most tenor buckets due to tightening liquidity conditions.
In its market note, Cowry Asset Management said the short-term benchmark rates, such as the open repo rate and the overnight lending rate, moderated to 11.70% from 11.90% and 12.20% from 12.30%, respectively.
The liquidity in the financial system closed below ₦200 billion, according to TrustBanc Capital Limited, adding that in the absence of any significant obligation, the firm expects the current trend to persist. #Rates on Nigerian Treasury Bills Crash
