CBN Trims Interest Rates on Treasury Bills, Raises N71bn
The Central Bank of Nigeria (CBN) cut interest rates on Nigerian Treasury bills (CBN) after Wednesday’s primary market auction was significantly oversubscribed.
In contrast to expectations, the authority auctioned N900 billion worth of Nigerian Treasury bills at the last auction for Oct., N100 billion above its offer circular.
According to the auction results, the CBN offered N100 billion worth of 91- and 182-day Treasury bills for subscription, and it targeted N700 billion from one-year paper.
Total subscription came in at about N1.908 trillion, with most of the amount channelled into 364-day Nigerian Treasury bills. The CBN allotted N71.16 billion across the standard tenors, with spot rates lower across the board.
Details showed spot rates fell across standard tenors, reflecting sustained repricing of fixed-interest securities after a 350-basis-point cut in the policy rate.
The CBN priced 91-day Treasury bills at 15.40%, according to auction results, down from 15.50% at the previous outing, and raised N22.33 billion out of N51.56 billion bid by investors.
Investors placed N20.27 billion against a N100 billion offer size for 182-day Treasury bills, and the authority allocated only N10.45 billion to investors at 15.79%, down from 15.80% at the previous auction.
Nigerian Treasury bills with 364-day maturity worth N38.38 billion; though N700 billion was offered, total bids reached N1.836 trillion. The spot rate on the 364-day bill was also lower, at 15.80%, down from 15.90% at the previous auction. Excess Liquidity in Banking System Rises to N6.94trn, Rates Mixed
