Rates on Nigerian Treasury Bills Dip, CBN Rejects Bids
The apex bank priced Nigerian Treasury bills’ spot rates lower Thursday at the just-concluded primary market auction held ahead of inflation data. The recent spot rate pricing indicates that the monetary authority is leading efforts to reduce balance-sheet funding costs.
It started with lowering spot rates on the one year tenor bills: both Treasury and open market operation bills, to a level permitted by the sustained surge in demand by investors.
At the Nigerian Treasury bills auction on Thursday, the Central Bank (CBN) offered N44.21 billion across the standard maturities, according to auction results cited by fixed income analysts.
The auction was scheduled to rollover N44.28 billion in maturing Treasury bills as part of a plan to raise more than N1.564 trillion from the instrument in the third quarter of the year. In its note, CardinalStone told investors that the auction was oversubscribed, with bid-to-cover and bid-to-offer settling at 7.38x and 9.22x, respectively.
Nevertheless, the CBN allotted only N55.23 billion, which was 13.5% of the total subscription staked by investors seeking opportunities to boost portfolio returns.
Due to heavy demand for Treasury bills, the average stop rate declined 14 basis points to settle at 18.1%, CardinalStone said. Elsewhere, the money market rates—open repo and overnight lending rate expanded by 61 bps and 53 bps, respectively, to close at 30.64% and 31.16%. Rates on Nigerian Treasury Bills Dip, CBN Rejects Bids
