Central Bank of Nigeria Hikes Interest Rates on Treasury Bills
The Central Bank of Nigeria (CBN) hiked treasury bill rates after the authority kept the monetary policy rate at 26.5% last month as inflation accelerated toward 16%.
At the first primary market auction in June, the Apex Bank through Debt Management Office (DMO) offered N700 billion worth of treasury bills for subscription across standard tenor.
Its auction circular revealed the CBN planned to raise N150 billion from 91-day bills, N50 billion from 182-day bills and N500 billion from 364-day bills.
The auction recorded significant subscriptions from yield-seeking investors who participated in the midweek session, including banks, pension funds, and other asset managers.
Total subscription reached about N2.161 trillion as investors’ appetite for the naira asset remained elevated. The breakdown showed that Nigerian Treasury bills with 364-day tenors attracted N1.946 trillion from market participants, accounting for 90% of aggregate subscriptions.
The CBN allotted N1.243 trillion worth of one-year bills at a rate of 16.35%, a 20-basis-point increase from 16.15% at the previous auction.
Also, investors showed interest in 91-day Treasury bills, with the spot rate closing at 16.05%, up from 15.949% at the previous auction. The CBN approved all subscriptions for the shortest-tenor Treasury bills, totalling N131.181 billion.
The mid tenor, or 182-day bills worth N82.979 billion, was sold at a spot rate of 16.19%, up from 16.14%, as investors continue to seek attractive investment options across the money market.
In the secondary market, the average yield on treasury bills contracted by 2bp to 17.45%, reflecting minimal contractions across the curve: short (-1bp), mid (-1bp), and long (-2bp) segments, with notable demand for the 22-APR (-25bp) bill. CardinalStone Hikes Transcorp Target Price, Cites TransAfam Turnaround
