The average return on Nigerian Treasury bills closed flattish in the secondary market on Tuesday ahead of the Central Bank of Nigeria (CBN) primary market auction on Wednesday. As a result, the average yield closed flat at 7.6%. Similarly, the average yield was unchanged at 13.3% in the OMO bills segment.
On Wednesday, existing T-Bills totalling N214.74 billion split as N1.03 billion, N10.55 billion and N203.15 billion across the 91-day, 182-day, and 364-day instruments, respectively will mature and be rolled over.
MarketForces Africa reported that at the last auction, investors stake N1.54 trillion on Nigerian Treasury bills, the highest in 2023, significantly exceeding the total amount offered of N303.21 billion.
Eventually, N303.21 billion was allotted, bringing the overall bid-to-cover ratio to 5.09x. Despite this strong level of demand, the stop rate on the 91-day, 182-day, and 364-day instruments increased by 19 bps, 210 bps, and 417 bps, reaching 5.19%, 8.00%, and 13.97%, respectively.
In the coming auction, Meristem Securities analysts said they anticipate a decline in rates across the trio instruments. Analysts said this expectation stems from the higher interbank liquidity which settled at N353.60 billion as of Sept 4 relative to the amount offered, which could exert downward pressure on rates.
In the money market, the overnight lending rate expanded by 115 basis points to 3.4% over moderate liquidity pressures in the financial system. The open repo rate (OPR) climbed 125 basis points to 2.83%