Stop Rates Rise as Investors Demand for Higher Yields…

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In the just concluded week, the CBN refinanced all the matured treasury bills which totaled N208.60 billion.

For the auctioned bills, stop rates for the 91-day, 182-day and 364-day bills increased, in line with our expectation, to 11.10% (from 9.70%), 11.59% (from 11.35%) and 12.90% (from 12.00%) respectively as investors demanded for higher real returns.

Additional bills worth N270.17 billion were auctioned via the Open Market Operation (OMO); hence, the total outflows which amounted to N478.77 billion partly offset the total inflows worth N601.90 billion in matured T-bills.

Hence, NIBOR moderated for all tenor buckets – NIBOR for overnight funds, 1 month, 3 months and 6 months tenure buckets to 9.25% (from 19.17%), 13.19% (from 15.37%), 12.98% (from 14.87%) and 14.98% (from 16.22%) respectively amid financial liquidity ease.

Meanwhile, NITTY fell for most maturities tracked as rates in the primary market were well below the yields in the secondary market – yields on 1 months, 3 months, 6 months and 12 month contracted to 12.62% (from 14.65%), 12.17% (from 14.02%), 13.71% (from 15.10%) and 14.41% (from 14.52%) respectively.

In the new week, treasury bills worth N553.84 billion will mature via OMO; hence, we expect interbank rates to moderate further amid anticipated boost in financial system liquidity.

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