The interest rate on Treasury notes offered to investors in the primary market auction held midweek has been further lowered by the Central Bank of Nigeria (CBN). In the face of limited liquidity in the financial system, the apex bank saw greater bids in its primary market auction.
The CBN offered N142.56 billion across normal maturities during the auction. CardinalStone Securities Limited stated in its market report that the overall remand or subscription level came in strong at over N757.85 billion, resulting in a 5.32x bid-to-offer ratio.
The auction results show that authorized dealers who participated in the auction received a total of N362.45 billion in Treasury notes, resulting in a bid-to-cover ratio of 2.09x.
Like its recent past auction, the apex bank was able to reduce spot rate on the longer tenor while rates on short and mid end of the curve were retained.
The stop rate on the 91-day and 182-day treasury bills instruments stayed flat at 16.24% and 17.00%, respectively. Meanwhile, the 364-day Treasury bills instrument fell 42 basis points to settle at 20.70% compared to the previous auction results.
In the money market, interbank rates diverged, according to CardinalStone Securities Limited. The open repo rate (OPR) declined by 61bps to close at 29.35%. The overnight lending rate increased by 58 basis points to settle at 31.33% due to the low level of liquidity.
