CBN Reduces Interest Rates on Nigerian Treasury Bills
The Central Bank of Nigeria (CBN) reduced interest rates on Nigerian Treasury bills across standard maturities, its primary market auction results revealed.
The spot rate on one-year treasury bills was axed by 101 basis points, reflecting its adjustment to the monetary policy rate and robust liquidity in the financial system. The Nigerian treasury bills with 91 days to maturity were spared, while the rate on 182 days bills was slashed by slightly.
The authority floated its first treasury bills auction on Wednesday, where N570 billion worth of Nigerian short-term borrowing instruments were offered for subscription.
Investors staked N1.064 trillion on the offer size due to strong appetite for the naira assets with the expectation that inflation will maintain a downward trend.
Excess money in the market also chased the CBN offer, though investors anticipated rates would be repriced on the back of improved macro indicators.
Reflecting appetite for duration, the total subscription of Nigerian Treasury bills that will expire in 364 days came at N986.33 billion as against N350 billion that was offered for sale.
Out of the amount, the CBN allotted one year bills worth N503.30 billion to investors at the spot rate of 15.77%, a sharp decline from 16.78% at the last auction in Q3. .
At the belly, the CBN sold N41.33 billion worth of 182 days bills at the rate of 15.25%, down from 15.30% as investors’ aggregate subscription of N52.12 billion surpassed the offer size of N120 billion.
With a N25.37 billion allotment, Nigerian Treasury bills that will expire in 91 days was priced at 15%, the same spot rate as at the previous auction, as total subscription reached N25.97 billion at the midweek auction. Access Holdings Ticks Up, Equity Analysts See 60% Upside
