N114bn Treasury Bills Sold by CBN

Treasury bills valued at N114.39bn with maturities ranging between three months and one year was sold by the Central Bank of Nigeria last week.

An analysis of the amount of the instrument auctioned indicated that N21.53bn worth of three-month paper at 9.95% was sold by the central bank, higher than 9.95% sold at the previous auction on September 17.

It also sold N33.78bn in 6-month notes at 10.10%, 13 basis points lower than the previous auction.

In all, N59.08bn in one-year debt at 10.35% was raised was raised by CBN, having same amount at which the paper produced the last time it was sold on September 3.

At the auction, total demand for the fixed income instrument was put at N181.44bn at the auction, compared with N122bn for the 3-month and 6-month paper sold at September 17, auction.

In the meantime, the week commenced highly liquid, in the interbank money market as rates declined across various money market instruments.

This reflected in the Call and Open Buy Back (OBB) rates that closed at 10.8% and 10.4%.

The addition of N293bn Federation Account Allocation Committee (FAAC) funds which hit the system during the week was largely credited for this.

The CBN was said to have subsequently mopped up N130bn through open market operations (OMO).

In addition, the CBN mopped up N70.3bn on last Thursday after repaying OMO debt worth N144bn the same day. Nonetheless, week-on-week, call and OBB rates were flat 10.8% and 10.5%.

“We expect maturing OMO bills worth N258.8bn to hit the system, while the Debt Management Office September 2014 bond will mature on 28th.

“We anticipated that the CBN will intervene via OMO mops-ups to keep liquidity in check. Hence, we expect rate to stay flat,’’ analyst at Afrinvest Securities Limited predicted.