Stop Rates Drop Further on Sustained Demand Pressure…

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In the just concluded week, CBN refinanced N88.86 billion T-bills which matured via the primary market at lower rates for all maturities as investors continued to demand for short-term government debt despite rates falling below
4.00%.

Specifically, 91-day, 181- day and 364- day bills fell to 1.79% (from 1.80%), 1.91% (from 2.04%) 3.39% (from 3.75%) respectively.

An additional N333.31 billion worth of T-bills matured via OMO, which less N100 billion in OMO auctioned bills, resulted in a total net inflow of N233.31 billion.

Given the financial system liquidity boost, NIBOR for 1 month, 3 months and 6 months tenor buckets moderated to 3.90% (from 5.29%), 3.95% (from 5.71%) and 4.37% (from 6.32%) respectively.
However, NIBOR for overnight funds rose to 19.00% (from 17.00%).

Meanwhile, NITTY moved southwards for most maturities tracked in tandem with the lower stop rates at the primary market; hence, yields on 3 months, 6 months and 12 months maturities dropped to 1.65% (from 1.92%), 1.89% (from 2.22%) and 3.07% (from 3.25%) respectively.

In the new week, treasury bills worth N16.00 billion will mature via OMO; nevertheless, we expect interbank rates
to rise marginally given the relatively smaller amount of maturing T-bills.

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