CBN to Sell Nigerian Treasury Bills at Midweek Auction
The Central Bank of Nigeria (CBN) is scheduled to hold another Treasury bill auction with N81 billion on offer for subscriptions from investors on Wednesday. The offer size will be relatively small when compared with past auction records, which received significant bids from investors.
The market anticipates liquidity in the money market to tighten as the CBN could also conduct an OMO bills auction to refinance the maturing instrument.
In total, the market could see a total of N345 billion mop-up from OMO bills and treasury bill auction sales in the week. OMO bills totaling N264 billion will mature, and analysts said the inflows would bolster the excess liquidity in the money market in the absence of a refinancing move.
Also, the maturing inflow from treasury bills is expected to enhance liquidity levels and reduce short-term benchmark interest rates in the money market. Analysts said they expect the CBN to offset these inflows through an OMO auction, consistent with its tightening stance.
The Apex Bank has remained aggressive with liquidity management efforts, and its recent actions showed that two primary market auctions are expected to be conducted this week.
Last week, the CBN offered Nigerian Treasury bills worth N450.00 billion, and the amount was split as N50.00 billion for the 91-day, N100.00 billion for the 182-day, and N300.00 billion for the 364-day bills.
Total subscription levels settled higher at N1.31 trillion, up from N1.17 trillion recorded at the previous auction, indicating a bid-to-offer ratio of 2.9x, up from the previous record of 2.3x.
The auction closed with the DMO allotting exactly the total amount offered—N50.00 billion for the 91D, N30.03 billion for the 182D, and N369.97 billion for the 364D papers—at respective stop rates of 17.98% (previous: 18.00%), 18.50% (unchanged), and 19.35% (previous: 19.56%).
Last week, the CBN upheld its tight monetary stance by issuing a ₦600 billion OMO offer, with demand and allotment reaching ₦1.529 trillion and ₦1.512 trillion, respectively. #CBN to Sell Nigerian Treasury Bills at Midweek Auction Unilever Nigeria Hits 52-Week High, Approaches New Target Price
