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Treasury Bills fall to 2-month low on Over-Subscription

By Ottoabasi Abasiekong on November 23, 2012

In a new development on the money market the Central Bank’s decision to hold its benchmark rate at 12 percent with a view to checking Inflation and stabilizing the currency margin in the midst of the global uncertainty has created a treasury bill yields decline.

The Central Bank sold 31.246 billion naira of 182 debt at 12.45 percent and 54.29 billion naira of 364 day securities at 12.50 percent, revealing a Total 355.9 billion naira, the highest transaction since October 24.

Non-Competitive bidders enjoyed the transaction the most as Nigeria sold about 23.907 billion naira of 91-day securities at a yield of 12.40 percent, 30.104 billion naira of 182-day debt at 12.45 percent to them.

The Naira proved stronger at 157.42 a dollar as of 11.49 am yesterday in Lagos, showing a rise at 3 percent level this year so far,, making it the second best performing currency in Africa after the Guinean Franc.

This resilience and stabilization is repositioning the Nigerian economy to be a key player even at the currency level in the global market and should set the pace for attracting more trade, transactions and investments in the market.

Mr Wale Abu President of the Financial Market Dealers Association in a telephone interview monitored by Bloomberg news said ‘Subscriptions is rising due to attractive yield’, he went unto further state ‘By holding the Interest rate at 12 percent, investors expect the Central Bank will borrow at a rate that is at par with the benchmark rate.

This shows a positive outlook for the naira currency and the economy especially at a time when the Nation recovered from devastating experience of the ravaging floods that hit the Northern parts of Nigeria, which caused slight Inflation as at Nov 20 but has been stabilized.

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