CBN Hikes Interest Rates on Nigerian Treasury Bills
The Central Bank of Nigeria (CBN) raised spot rates on Nigerian Treasury bills at the primary market auction on Wednesday as declining yields trigger the risk of capital outflows.
Demand remained strong, as reflected in the auction results conducted by the Debt Management Office (DMO) on behalf of the monetary authority. MarketForces Africa reported that the CBN offered N550 billion across standard maturities: 91-, 182-, and 364-day papers.
Investors staked N1.27 trillion on the offer, translating to a bid-to-offer ratio of 2.30x, though quite low when compared with previous auction sales. The subscription level reflects increasing demand for the naira asset despite tight liquidity conditions in the money market at the time.
Again, market participants, which include Nigerian deposit money banks, pension asset managers, and other institutional investors, showed preference for long-term papers. Details revealed that 364-day papers were very much in demand, accounting for 94% of the total subscription submitted at the main auction amidst rate repricing.
The DMO successfully allotted N678.76 billion, exceeding the offer size by 23%, with the 364-day paper receiving 90% of the total allotment. Stop rates for the 91-day Treasury bills paper remained unchanged at 17%.
With steep demand, spot rates for the 182-day and 364-day Treasury bills instrument were adjusted higher by 4 basis points and 57 basis points, respectively, to close at 17.79% and 18.39%. #CBN Hikes Interest Rates on Nigerian Treasury Bills NEM Insurance Steadies at Fair Discount to 52-Week High
