By Obinna Chima
Treasury Bills subscription in November increased by 12.2 per cent to N659 billion, compared to the N587.55 billion recorded in October, a report by the Financial Market Dealers Association (FMDA) has shown.
The FMDA stated this in its financial and economic report for November obtained at the weekend.
It showed that at the first and second auction in the month under review, 91 days stop rates averaged 12.57 per cent, against 12.94 per cent the previous month. Also, the 182 days tenor averaged 12.74 per cent, relative to 13.29 per cent in October, while 364 days bills averaged 12.77 per cent when juxtaposed with 13.3 per cent the preceding month.
It explained: “The rate of return in the Primary Market Auction (PMA) fell marginally in the month under review when compared with the average rate of the previous month, even as inflation rate inched up by 40 basis points. Occasional cash inflows from additional sources complemented inflows from conventional sources which facilitates relative market liquidity in November.
“Meanwhile, Central Bank of Nigeria (CBN) allotted N246.03 billion against N283.10 billion bills in October 2012. Available data revealed that series of Open Market Operations (OMO) auctions session was conducted in the month to mop up excess liquidity created by maturing bills, FAAC fund, Ecological fund and JV Cash Call disbursements.
“Hence, the CBN offered N820 billion and sold N857.92 billion. The relatively high OMO sales recorded were traceable to the 120 basis points interest rate differentials between sub-91 day OMO bills and 91-day PMA bills coupled with availability of investible funds.”
The summation of PMA and OMO auctioned showed that the month recorded N1.103 trillion (N246.03 billion PMA and N857.92 billion OMO) against N1233 trillion in October. A net outflow of N512.43bn was recorded in the month under review as against N553.97 billion net inflow experienced in the preceding month.
It also showed that the value of the naira against the dollar recorded mixed outcomes across the four segments of the markets in November. On the average, the naira retained its value at the CBN’s window and Bureau De Change (BDC) segment when compared with October’s average rate.
“However, the naira appreciated by 50 kobo at the interbank, while it depreciated by 20 kobo at the parallel market relative to October’s average rate. The relative stability of foreign exchange within the N155/$ +/- 300bps corridor could be attributed to same prevailing stable macroeconomic environment since the previous month.
“The foreign exchange traded between N155.74/$ –N155.76/$ at WDAS, N157.17/$ – N158.01/$ at Interbank, N158.81/$ – N159.40/$ BDC and N159.00/$– N159.70/$ at parallel market. The range widened more for the BDC and parallel markets in the month under review.
The premium between CBN and Parallel market as end-November stood at 2.08 per cent, same as the value recorded at the end of October 2012.