CBN Hikes 1-Year Nigerian Treasury Bill Rate to 15.89%
The Central Bank of Nigeria (CBN) repriced the 364-day Treasury bill rate at the midweek auction to 15.89%, with total subscriptions exceeding N1 trillion.
On behalf of the CBN, the Debt Management Office (DMO) auctioned N800 billion in Nigerian Treasury bills across standard tenors of 91, 182, and 364 days.
The main auction attracted strong investor interest, with total subscriptions of N1.12 trillion against the N800.00 billion offered, yielding a bid-to-cover ratio of 1.40x.
Total allotments across the short, mid and long tenors settled at N713.30 billion, or about 89.2% of the offer, reflecting sustained demand for government securities.
Investor participation was largely concentrated in the 364-day instrument, which attracted bids of N1.08 trillion, representing about 96.7% of total subscriptions.
The CBN allotted N672.91 billion in 364-day bills against an initial offer of N600.00 billion at a stop rate of 15.89%, 9 basis points above the previous discount rate.
Meanwhile, the 182-day bill recorded subscriptions of N23.02 billion and an allotment of N22.28 billion, while the 91-day instrument attracted N19.18 billion in bids, with N18.12 billion allotted.
Stop rates for 91- and 182-day Treasury bills were 15.40% and 15.79%, while the 364-day instrument was 15.89%, indicating a gradual increase in yields across maturities.
Analysts at Cowry Asset Management Limited said spot rate pricing suggests that investors received marginally higher returns for committing funds over longer periods.
“In summary, the auction underscores investors’ strong preference for longer-tenured Treasury Bills, with the 364-day instrument accounting for the bulk of total subscriptions.
“The strong demand at the longer end reflects investors’ interest in locking in prevailing yields amid uncertainty about the future direction of monetary policy”, the investment firm said.
#CBN Hikes 1-Year Nigerian Treasury Bill Rate to 15.89% Foreign Investors Pivot into US Dollar Bonds, Yields Ease
