CBN Cuts Spot Rates on Nigerian Treasury Bills, Rejects Bids
The Central Bank of Nigeria (CBN) has marked down its spot rates on Nigerian Treasury bills across standard tenors, its primary market auction revealed, reflecting a shift from previous trends despite keeping its monetary tightening stance.
The auction was conducted by the Debt Management Office (DMO) on behalf of the Apex Bank amidst efforts to keep local borrowing rates in check as key macro indicators improve.
The auction results obtained by MarketForces Africa showed that the authority offered N290 billion for a combination of Nigerian Treasury bills maturing in 91 days, 182 days, and 364% to investors ahead of papers that will expire this week.
The offer size floated at the main auction was split into N50 billion for 91 day bills, while previous auction results often showed investors have low appetite for short duration.
The CBN also offered N20 billion worth of Treasury bills with 182 days maturity, often the lowest offer size among the standard tenors. For 364 days treasury bills, the authority sought to raise N220 billion from investors at the primary market.
The auction was oversubscribed by 232% as appetite for naira assets remained strong amidst falling yield in the secondary market. Investors staked N675.67 billion via competitive bids but the authority sold to match its offer size at lower spot rates.
Auction results obtained by MarketForces Africa showed that the CBN raised N13.11 billion out of N41.66 billion staked by investors for Nigerian Treasury bills maturing in 91 days at the rate of 15%, which is 74 basis points below the previous rate.
Treasury bill papers for 182 days to maturity attracted N24.66 billion in subscriptions from investors versus N20 billion offer size. However, a huge part of the total bids submitted were rejected as the CBN allotted N5.10 billion at the spot rate of 15.50%, which is 70 basis points below the previous auction.
For 364 days, Nigerian bills with a N220 billion offer size had a total subscription settled at N609.32 at the midweek auction. The CBN sold one-year bills worth N271.79 billion at a lower spot rate of 15.88%, a decline of 42 basis points from the previous rate.
MPC: Analysts Differ on Monetary Easing, Rule Out Interest Rate Hike
