Stop Rates Rises as Investors Demand Higher Rates for Longer Maturities…

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In the just concluded week, CBN refinanced
N197.59 billion T-bills which matured via the primary market at higher stop rates for most maturities as investors demanded for higher rates on the longer Maturities.

Specifically, stop rates for 182-day and 364-day bills rose to 1.80% (from 1.39%) and 3.34% (from 3.20%)
respectively.

However, rate on 91-day bills fell marginally to 1.15% (from 1.20%).

An additional N282.50 billion worth of T-bills matured via OMO, which less N97.27 billion in OMO auctioned bills, resulted in a total net inflow of N185.23 billion.

Hence, given the boost in financial system liquidity, NIBOR moderated for most tenor buckets. NIBOR for 1 month, 3 months and 6 months crashed further to 2.79% (from 3.55%), 2.94% (from 3.91%) and 3.12% (from 4.13%) respectively.

However, overnight funds rose sharply to 12.58% (from 5.08%). Meanwhile, NITTY performance was mixed as investors bought maturities with higher yields.

While yields on 1 month and 6 months maturities rose to 1.16% (from 1.04%) and 1.54% (from 1.47%) respectively, yields on 3 months and 12 months maturities fell to 1.18% (from 1.32%) and 2.79% (from 2.92%).

In the new week, treasury bills worth N321.48 billion will mature via OMO; hence, we expect interbank rates to moderate further given the relatively huge amount of maturing T-bills.

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