CBN to Open N670bn Treasury Bills for Subscription
The Central Bank of Nigeria (CBN) is expected to conduct a primary market auction to raise N670 billion from Treasury bills as part of its liquidity management efforts.
The amount will be offered across three tenors: 91-day, 182-day, and 364-day, as old naira assets are expected to mature in the same week. According to market updates, a total sum of N955.369 billion in Nigerian Treasury bills would mature this week, part of which is expected to be refinanced with the amount the authority seeks to raise.
Due to the robust liquidity level in the banking system, the Treasury bills auction is expected to be oversubscribed with the same pattern of preference seen in the recent past.
In January, the Debt Management Office raised N1.27 trillion via the PMA, a 21.40% decrease from December’s N1.67 trillion. At the last auction in January, the DMO N530 billion at the primary market auction. Investors showed strong interest, pouring in N2.5 trillion, resulting in a bid-to-offer ratio of 4.8x.
The government offered T-bills in three durations: 91-, 182-, and 364-days, with the 364-day bills attracting the most funds. Despite high demand, the DMO sold N756.0 billion worth of bills, with interest rates remaining mostly steady.
Auction results revealed that investors showed preference for longer maturity instruments, underpinned by the need to lock in the current high yield given uncertainty around monetary policy direction post-CPI reconstitution exercise, Afrinvest said.
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