Rates to trend high on treasury bills, bond auctions

There are indications that money market rates will rise this week as the Central Bank of Nigeria (CBN), the Debt Management Office (DMO) plan several issues that will have impact on liquidity.

In the week ahead, “we expect money market rates to trend northwards as liquidity levels tighten in response to the scheduled CBN T-bills auction of N218.8 billion, the DMO monthly bonds auction and the commencement of the FGN savings bonds,” one dealer said.

This week, there will be treasury bills auctions worth N213.763 billion via primary market, viz: 91-day bills worth N39.006 billion, 182-day bills worth N48.453 billion and 364-day bills worth N126.304 billion which will more than offset maturing treasury bills worth N170.508 billion via primary market, viz: 91-day bills worth N39.006 billion, 182-day bills worth N48.453 billion and 364-day bills worth N83.049 billion. Also , the Debt Management Office (DMO) is scheduled to auction about N130 billion instruments at its primary market auction for March.

Specifixally, dealers expect increase in interbank interest rates on likely liquidity stain amid fixed income auctions comprising treasury bills and Federal Government savings bonds. The planned launch of the sovereign savings bond is scheduled for Monday, March 13.

The retail bond, issued by the Debt Management Office, DMO, will be offered monthly in tenors of two and three years, with quarterly payment of interest to investors.

To ensure the offer reaches the last mile subscribers, the NSE said, the DMO has accredited eighty-seven (87) stock-broking firms of the Nigerian Stock Exchange to market and distribute the Savings Bond.

Meanwhile, the Central Bank of Nigeria said it plans to issue treasury bills worth N1,129,855,189 in the second quarter of the year. According to the CBN’s Nigerian Treasury Bills issue programme posted on its website, 91-day treasury bills issue worth N242,673,157 would be sold in next quarter. In the same vein, 182-day valued at N197,891,045 would be issued during the period, just as 364-day bills valued at N689,290,987 would also be auctioned by the regulator next quarter.