Decline in TB Rates May Persist as CBN Sells N122Bn’   

The decline in yields on treasury bills (TB) which commenced last month is expected to persist this week when the Central Bank of Nigeria (CBN) sells N122 billion worth of fresh bills.

The decline in TB yields which is driven by increased demand from investors, is reflected in the huge oversubscription recorded in the last primary market auction conducted by the apex bank on October 2nd.

While the CBN offered and sold N134 worth of TBs, total public subscription stood at N338.2 billion, translating to152 percent over subscription.

In response the CBN reduced the stop rates of the 91-Days bills, 184-Days bills and 364-days bills of 11.08 percent, 11.60 percent and 13.20 percent respectively from 11.10 percent, 11.75 percent and 13.30 percent from the last auction. Analysts at Lagos based Cowry Assets Management Limited projected that this trend will persist this week due to increased demand for TBs by investors.

They said: “In the new week, CBN will refinance T-bills worth N121.88 billion, viz: 91-day bills worth N5.85 billion, 182-day bills worth N3.50 billion and 364-day bills worth N112.54 billion. We expect their stop rates to decline marginally, particularly at the long end of the curve, as investors have shown sustained preference for the 364-day bills in previous auctions. We also expect NIBOR to moderate amid maturing N463.98 billion OMO-bills’’.