CBN Reprices Rate on 364-Day Treasury Bills, Turndown 82%
The Central Bank of Nigeria (CBN) repriced the spot rate on Nigerian Treasury bills (NTBs) with a 364-day tenor to 17.15% at the main auction conducted on Wednesday.
The CBN offered N700 billion in Nigerian Treasury bills at the main auction for investor subscription. With robust liquidity in the financial system, a slew of analysts predicted the midweek auction would be well received.
Total subscription was recorded at about N3.787 trillion, more than 5x the amount placed before investors at the auction.
The one-year Nigerian Treasury bill attracted about 96% of total bid subscriptions. These confirmed investors are seeking investment options with long durations and attractive returns.
The breakdown of the CBN auction results showed investors bid for N103.20 billion worth of 91-day bills, exceeding the N100 billion offered. The CBN allotted N89.10 billion in 91-day papers at a rate of 16.30% to investors – the same as the previous auction.
At the belly of the offer, the CBN targeted N100 billion from sales of 182-day Treasury bills. Demand came in lower, settling at N52.93 billion. The authority allotted N35.59 billion in 182-day bills at a rate of 16.50%, the same as the previous auction.
With total subscriptions of N3.630 trillion chasing an N500 billion offer size, the CBN repriced the spot rate on the 364-day Nigerian Treasury bill to 17.15% from 17.59% at the previous auction.
The CBN allotted N638.19 billion of one-year paper to investors at a 17.15% discount rate, reversing its most recent upward offer to market participants. The allotment is about 18% of the subscription line for 364-day Nigerian Treasury bills.
