Stop Rates Drop Further on Sustained Demand Pressure…


In the just concluded week, CBN auctioned Treasury bills worth N67.44 billion via the primary market.

In line with our expectation, stop rates for 90-day, 182-day, and 364-day bills moderated to 2.75% (from 5.50%), 7.15% (from 7.30%), and 8.49% (from 9.89%), respectively, amid investors’ high demand for short term fixed income securities.

We saw the 90-day, 182-day, and 364-day T-bills were oversubscribed with a bid-to-cover ratio of 10.36x, 1.19x, and 6.39x respectively.

Notably, the auctioned T-bill outflows exceeded the total inflows of N64.43 billion.

In line with the direction of rates in the primary market, NITTY for 1 month, 3 months, 6 months, and 12 months maturities fell to 2.75% (from 5.13%), 3.94% (from 6.24%), 5.69% (from 8.83%), and 8.80% (from 10.60%), respectively.

Meanwhile, NIBOR moved northwards (bearish) for the bulk of maturities tracked despite N30 billion worth of OMO bills maturing via the primary market.

Specifically, NIBOR for Overnight fund, 3 months, and 6 months tenor buckets increased to 10.00% (from 9.73%), 13.06% (from 11.98%), and 13.94% (from 12.50%) respectively.

However, NIBOR for 1 month stayed unchanged at 11.50% w-o-w

OMO maturity bills worth N20.00 billion is expected to hit the system and keep liquidity afloat; nevertheless, we expect interbank rates to rise marginally given the relatively smaller amount of maturing bills..

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