CBN Sells N173.37b Treasury Bills as NIBOR Rises Amid Financial System

By Cowry Asset

In the just concluded week, the Central Bank of Nigeria (CBN) sold treasury bills, via primary and secondary markets, totalling N173.37 billion viz: 79-day bills worth N0.002 billion, 80-day bills worth N0.005 billion, 91-day bills worth N28.12 billion (Stop Rate, SR, fell to 13.10% from 13.25%), 182-day bills worth N23.68 billion (SR fell to 16.80% from 17.36%), 184-day bills worth N14.92 billion, 185-day bills worth N17.56 billion and 364-day bills worth N89.08 billion (SR fell to 17.00 from 17.75%).

These auctions were partly offset by matured treasury bills worth N140.88 billion.

Consequently, NIBOR rose for most of the tenor buckets amid financial system liquidity strain as auctions exceeded maturities: NIBOR for the Overnight funds, 1 month and 3 months rose w-o-w to 32.39% (from 12.00%), 18.53% (from 17.44%), and 21.44% (from 20.48%) respectively.

However, NIBOR for the 6 months tenor buckets fell w-o-w to 22.61% (from 22.93%).

Elsewhere, NITTY fell for all of the maturities amid sell pressure – yield on the 1month, 3 months, 6 months and 12 months maturities fell to 11.31% from (15.43%), 17.59% (from 18.30%), 17.91% (from 19.16%) and 19.36% (from 20.62%) respectively.

This week, there will be maturing secondary market securities worth N123.53 billion viz: 338-day bills worth N28.82 billion and 339-day bills worth N94.71 billion. There will be no primary market auctions during the week. As such, at the interbank market, we expect financial system liquidity ease with resultant decrease in interbank rates.