CBN to Open Treasury Bills Worth N480bln for Subscription
The Central Bank of Nigeria (CBN) will open N480 billion worth of Nigerian Treasury bills for investors’ subscription at the primary market auction scheduled for Wednesday. The auction will be conducted by the Debt Management Office (DMO) on behalf of the monetary authority, and analysts projected a strong subscription level.
Details obtained revealed the CBN plan to raise N450 billion across standard tenors—91-day, 182-day, and 364-day treasury bill instruments—to replace the expired one. The market anticipates a total of N324.41 billion in Treasury bill maturities will boost liquidity level in the financial system, potentially providing additional liquidity support.
A slew of analysts differ on their rate expectations, citing recent open market operations conducted by the Apex Bank at much heavier rates. Recall that the CBN conducted two OMO auctions last week, offering a total of ₦700 billion but raising ₦1.19 trillion, with the stop rate closing settling at 26.49% and 26.50% for the 83-day and 84-day maturities, respectively.
Fixed interest securities analysts doubt that the CBN will be generous with rates on Treasury bills following a sharp pricing at the open market operations for its bills sold to foreign portfolio investors and local deposit money banks.
“The first Treasury bills auction for the month of September is expected to be held next week Wednesday, with ₦480 billion on offer. We think the auction would close mixed, amid the current volatility in the market. However, we opine that demand for duration would persist at the auction,” analysts at AAG Capital Limited said in a note.
The Treasury bills market traded quietly for most of the week, with activity largely concentrated on select OMO and Treasury bills papers. Early sessions were muted as investors awaited the bond auction, with only mild interest in the 16-Dec, 17-Feb, and 7-Apr bills.
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