CBN Hikes Rates on Nigerian Treasury Bills as Demand Tightens

CBN Hikes Rates on Nigerian Treasury Bills as Demand Tightens

The Central Bank of Nigeria (CBN) has raised the interest rate on Nigerian Treasury bills across standard maturities. The spot rates jerked up across three tenors offered as demand or total subscription tightened.

At the just concluded primary market auction conducted on Wednesday by the monetary authority, the spot rates were adjusted on 91-day, 182-day, and 364-day Nigerian Treasury bills as aggregate subscription levels declined sharply week on week.

A total of N800 billion in Nigerian Treasury bills were offered to market participants, including local deposit money banks and asset managers. The auction conducted by the Debt Management Office (DMO) on behalf of the CBN attracted N992.04 billion from investors who submitted their bids.

According to investment analysts, the subscription translated to a bid-to-cover ratio of 1.13x, lower than the previous auction’s 2.30x. The lower subscription at the main auction was as a result of banking deficit of about N1.7 trillion, according to analysts.

Again, investors’ appetite for long-dated bills was sustained as demand for 364-day bills accounted for 92% of total subscriptions. The CBN allotted N503.92bn, falling short of the offer size by 37%, with the 364-day paper receiving 87% of the total allotment.

The spot rate for 91-day Nigerian Treasury bills increased by 100 basis points to 18%. Also, 182-day Nigerian Treasury bills were priced higher by 71 basis points to 18.50%, and the one-year bills rate rose by 155 basis points to 19.94%. #CBN Hikes Rates on Nigerian Treasury Bills as Demand Tightens CBN Hikes Interest Rates on Nigerian Treasury Bills