CBN Cuts Interest Rates on Treasury Bills, Rejects Excess Demand
The Central Bank of Nigeria (CBN) cuts spot interest rates on Nigerian Treasury bills (NTB) with 91 and 364 days to maturities at the primary market auction (PMA) conducted on Wednesday – while excess competitive bids were rejected in totallity.
At the main auction floated by the Debt Management Office on behalf of the Apex Bank, investors’ subscriptions outpaced the N450 billion offer size put forward. Reflecting increase appetite for the naira assets by key market players, especially banks, the total subscription reached N1.31 trillion, which is about three times of the offer size.
Again, there was strong demand Nigerian Treasury bills with 364-day to maturity, reflecting sustained appetite for duration. The CBN opened N300 billion worth of 3640 day bills for sales, but investors demand came at N1.208 trillion while total allotment was N369.97 billion.
Spot rate on one year treasury bills was also reduced to 19.35% from 19.56% as competitive bids afforded the authority a chance to ease discount rate. Nigerian Treasury bills with 182 days to maturity was heavily undescribed. The offer size was N100 billion, but investors subscription was valued at N30.03 billion.
The CBN kept rate on 182-day treasury bills at 18.50% on total allotment was N30.03 billion – the entire bids submitted for the mid tenor bills. For 91 days to maturity bills, the shortest duration in the offer bucker, investors’ total subscriptions which came at N70.92 billion surpassed the N50 billion worth of bills the CBN put out for subscription.
Hence, the spot rate for 91 days paper reduced to 17.98% from 18% at the close of previous auction while CBN allotted to match its offer size. #CBN Cuts Interest Rates on Treasury Bills, Rejects Excess Demand Mozambique Cuts Interest Rate by 75 bps, Sees Steady Inflation
