Stop Rates Rise as Investors Demand for Higher Yields…


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.

This site uses Akismet to reduce spam. Learn how your comment data is processed.