Stop Rates Increase as Investors Demand for Higher Rates…


In the just concluded week, CBN refinanced
matured treasury bills worth N169.78 billion in the primary market as stop rates further closed higher for all maturities.

Stop rates for 91-Day, 182-Day and 364-Day rose to 1.00% (from 0.55%), 2.00% (from 1.3%) and 4.00% (from 2.00%) respectively.

The increase in stop rates for two consecutive auctions and spike in OMO rates last week was a clue to market
participants about a northward shift in interest rate; hence, NITTY rose for all maturities tracked as investors sold off to shop for higher rates.

Yield for 1 month, 3 months, 6 months and 12 months maturities rose to 0.95% (from 0.46%), 1.10% (from 0.46%), 1.94% (from 0.99%) and 2.56% (from 1.72%) respectively.

On the other hand, CBN sold OMO bills worth N169.00 billion out of the matured N200.76 billion bills. Despite the net matured bills worth N31.76, we saw NIBOR for 3 month, 6 months and 12 months climb to 2.05% (from 1.26%), 2.40% (from 1.19%) and 4.03% (from 1.75%) respectively.

However, overnight rate moderated to 4.92% (from 13.50%).

In the new week, treasury bills worth N260.21 billion will mature via OMO, hence we expect interbank rates to ease further amid anticipated boost in financial system liquidity.

This site uses Akismet to reduce spam. Learn how your comment data is processed.