Thursday, June 24, 2021

    Stop Rates of Auctioned T-Bills Plunge Below 0.50% for all Maturities…

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    Naija247news Media, New York
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    In line with our expectations, CBN refinanced N167.81 billion worth of T-bills via the primary market at lower stop rates which settled well below 0.5% for all maturities – suggestive of the
    increased liquidity in the system that continued to chase short-term government securities.

    Specifically, stop rates for 91-day, 182-day and 364-day bills crashed to 0.04% (from 0.34%), 0.15% (from 0.50%) and 0.30% (from 0.98%) respectively.

    Given the N226.82 billion matured
    bills as against the N70 billion auctioned bills via Open Market Operations (OMO), we saw a boost in the financial system liquidity and a resultant drop in NIBOR for all tenor buckets.

    NIBOR for overnight funds crashed to 1.0% (from 1.25%).

    Also, NIBOR for 1 month, 3 months and 6 months plummeted to 0.50% (from 1.12%), 0.93% (from 1.15%) and 1.71% (from 1.54%) respectively.

    Elsewhere, NITTY further moved northward for most maturities tracked, especially yields for 1 month, 3 months and 6 months maturities which increased to 0.21% (from 0.19%), 0.49% (from 0.22%) and 0.38% (from 0.36%) respectively.

    However, yield on 12 months maturity fell to 0.24% (from 0.41%). 10.00% 8.00% 6.00% 4.00% 2.00% 0.00%

    In the new week, treasury bills worth N281.45 billion will mature via OMO; hence, we expect interbank rates to further moderate amid anticipated boost in financial system liquidity.

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