Moderation in rates expected on N347.7 billion worth of OMO maturities

There are expectations that a N347.7 billion worth of Open Market Operation (OMO) Treasury Bills maturities will add to liquidity in the system and help in rates moderation this week.

In view of the above, dealers expect the Central Bank of Nigeria (CBN) to keep rates in check through regular auctions, albeit at higher rates.

Meanwhile, the CBN is set to sell N1 trillion worth of Treasury bills in the fourth quarter of the year across three instruments.

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According to the Apex Bank’s issue programme for the year, it would offer 91-day bills worth N90.62 billion; likewise 182-day bills worth N90.18 billion and 364-day bills worth N821.84 billion from September to December.

N90.624 billion according to the calendar is expected to mature and be raised from the 91-day bill at the seven auctions to be held between September 12 and November 28, 2019.

Likewise, N90.182 billion and N821.844 billion are expected to mature and be rolled over from the 182- and 364-day bills during the period.

The amount raised from last week’s auction was less than the N400 billion the apex bank had intended to mop from the system despite a total subscription of N451.33 billion.

Interests according to dealers had been high in the longer tenured bill as the 364-day bill was oversubscribed. Subscription for the 364-day bill, maturing September 3, 2020, from which N250 billion had been expected, stood at N408.12 billion with total sale of N312.48 billion at a stop rate of 13.5 per cent.

The 84- and 189-day bills were under subscribed as N640 million and N480 million had been raised from the two bills, lower than N50 billion and N100 billion offered respectively. The 84-day bill had been sold at 11.59 per cent yield, while the 189 –day bill had been sold at 11.79 per cent.

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