CBN Hikes Rates on Treasury Bills with 91, 182-Day Maturities
The Central Bank of Nigeria (CBN) has again increased the spot rates on Nigerian Treasury bills with 91 and 182 days maturities at the main auction conducted on Wednesday.
The Apex Bank lifted spot rates on the mid, and belly line while 364 days treasury bills was priced downward amidst strong demand for long duration at the auction.
The authority came to the market with N1.15 trillion treasury bills offer across standard tenors, but subscription was significantly higher, supported by a heavy appetite for the naira assets and a healthy liquidity position in the financial market.
Auction results revealed that investors staked about N3.438 trillion against the offer size, with about 98% coming for 364 days Nigerian Treasury bills. The breakdown showed that investors show low appetite for 91 days and 182 days bill with combined subscription level of N92.64 billion.
Meanwhile, the 364 days bills attracted more than N3.345 trillion in aggregate subscription level, reflecting sustained appetite for the long tenor.
The CBN raise N1.06 trillion across standard tenors, rejected the excess subscription and axed spot rate on 364 days. The Treasury bill with 91 days to expiration worth N40.61 billion was allotted by the CBN, and 182-day bills worth N42.16 billion was sold to investors.
The authority approved N977.68 billion worth of 364-day bills for allotment, which is 29% of the total bids submitted by fixed income securities investors that participated at the auction.
Spot rate for 91-day bills jerked up to 15.84%, from 15.80% that was previously on record. Spot rate on 182 days bills was increased to 16.65% from 16.50% – reflecting subdued appetite.
Following a significant show of interest in one year bills, the CBN slashed rate down to 18.36% from 18.47%, and rejected 70% of the bids submitted at the auction. Nigerian Top 5 Banks’ Valuation Increases to N12 Trillion
