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CBN Slightly Moderates One-Year T-Bills Rate to 9.64%



By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Wednesday, June 9, 2021, marginally reduced the stop rate of the one-year treasury bills at the primary market.

Investors were surprised to get the 364-day tenor at a rate 0.01 per cent lower than the previous session as the apex bank sold the instrument at 9.64 per cent in contrast to 9.65 per cent they purchased the same bill earlier.

This gave them an indication that the stop rate of the fixed income asset may have peaked and was likely finding its way downwards gradually again.

One of the major reasons for the slice in the rate may have been the strong appetite for the investment tool during the session.

The central bank, which sold the bill for the Debt Management Office (DMO) on behalf of the federal government, had offered N78.7 billion worth of it to investors.

But Business Post observed that the value of the subscriptions received for the long end of the curve stood at N308.5 billion, allowing the bank to tweak with the rate.

According to details of the exercise, subscribers bid within 9.00 per cent and 12.99 per cent, but it was allotted at 9.64 per cent for N164.1 billion.

The 12-month bill was not the only instrument auctioned yesterday by the apex as the two others were also offered for sale to investors.

For the 91-day bill, the bank auctioned N4.7 billion, while N7.8 billion worth of the 182-day tenor was offered for sale at the exercise.

It was observed that subscriptions worth N6.9 billion were received for the three-month maturity, with N5.1 billion allotted as the same 2.50 per cent stop rate, while bids received for the six-month instrument were valued at N11.7 billion with N10.1 billion allotted at 3.50 per cent, the same as the previous primary market auction.

In terms of the total value of the T-bills offered for sale, it stood at N91.2 billion, while the total value of the bids was N327.1 billion, with the amount allotted at N179.3 billion.

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