Interest Rate on Nigerian Treasury Bills Rises by 10bps
The spot interest rate on the Nigerian Treasury bill (NTB) was adjusted upward by 10 basis points (bps) at the primary market auction (PMA) conducted by the monetary authority on Friday.
MarketForces Africa reported that the Central Bank of Nigeria (CBN), through the Debt Management Office (CBN), auctioned N332.53 billion to investors. Investors doubled down bets on the naira assets on the expectation that the return would reduce their exposure to inflation.
The total subscription submitted by investors settled at N663.18 billion across standard maturities, more than 99% above the offer across the 91-, 182-, and 364-day papers. Again, appetite for long-dated bills came significantly strong, according to the auction result. The breakdown revealed that 92% of the subscription was for the 364-day paper, even in the midst of a liquidity shortfall in the money market.
Separate analysts reported that general bid-to-cover came in at 1.99x, lower than the previous auction’s 3.29x, as appetite for short-dated instruments declined. The Debt Office allotted Treasury bills worth N332.53 billion to successful investors, which triggered huge lost bids being reported.
Due to huge demand, 85% of bids submitted for 364 days on standard offer were sold to investors at a higher stop rate. Details from the auction revealed that. Stop rates remained steady, except for the 1-year paper, which rose by 10 bps to 22.90%. #Interest Rate on Nigerian Treasury Bills Rises by 10bps NGX Index Dips Intraday as Investors Book Profit in ARADEL, NB
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