NITTY, Stop Rates Remain Low Despite Currency Devaluation, Rising Borrowing Fears…

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In the just concluded wek, the CBN refinanced matured T-bills worth N86.30 billion via Primary market at lower rates for all maturities; stop rate
for the 91-day bill fell to 2.49% (from 3.00%), the 182-day bill decreased to 3.78% (from 4.00%) and the 364-day bill fell to 5.30% (from
5.70%) respectively. N223.70 billion worth of treasury bills matured via OMO which, combined with the primary market maturities (N86.30
billion), resulted in total inflows worth N310.00 trillion.

Hence, due to the net inflows, NIBOR declined further for overnight funds, to 10.42% (from 12.19%). However, NIBOR rose for other tenor buckets: 1
month, 3 months and 6 months tenor buckets increased to 10.96% (from 9.95%), 11.44% (from 10.08%) and
12.55% (from 10.80%) respectively.

Elsewhere, in line with our expectation, NITTY moderated for all maturities tracked despite the local currency devaluation and rising debts threats: yields on 1 month, 3 months and 6 months and 12 months maturities moderated to 2.82% (from 3.06%), 2.72% (from 3.41%), 3.54% (from 3.75%) and 5.09% (from 5.22%) respectively.

In the new week, T-bills worth N366.13 billion will mature via the primary and secondary markets which will more than offset T-bills worth N47.56 billion to be auctioned by CBN via the primary market; viz: 91-day bills worth N2.00 billion, 182-day bills worth N8.39 billion and 364-day bills worth N37.18 billion. Hence, we expect the stop rates to decline marginally amid financial liquidity ease.

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