The Central Bank of Nigeria (CBN), which conducted its main market auction midweek, further reduced spot rates on Nigerian Treasury Bills (NTB) by breaking significant subscription records, according to the data.
The central bank would renew maturing Treasury notes totaling N141.94 through primary market auction sales of 91-day, 182-day, and 364-day bills, totaling N3.15 billion, N1.49 billion, and N137.30 billion, respectively.
The stop rates for the 91-day Treasury notes dropped by one basis point to 2.86% as a consequence of the auction. Additionally, the 182-day spot rate was reduced by the apex bank by 87 basis points to 3.50%, and the 364-day tenor was reduced from 6.23% to 5.94% in the last auction.
The monetary authority distributed N141.76 billion out of the N691.85 billion subscribed by market participants on Wednesday due to a record-high demand.
According to a market update by fixed income analysts Cowry Asset Management Limited, subscription or demand increased as seen by a 4.88x bid-to-cover ratio, a modest increase over the 4.03x recorded in the prior offering despite strong liquidity.
As indications that market liquidity concerns would resurface so quickly and possibly with greater ferocity than in the past, funding rates rose. According to Futureview Financial Services, system liquidity climbed to $753.66 billion from $745.32 billion on Tuesday
Money market data showed that short-term benchmark rates such as the open repo rate and the overnight lending rate, increased to 0.93% (from 0.86%) and 1.33% (from 1.25%), respectively.
In the secondary market, trading activities on Nigerian Treasury bills closed flattish as market players shifted attention to the midweek auction of the CBN. As a result, the average yield was unchanged at 6.3%.
