CBN Selectively Hikes Interest Rates on Nigerian Treasury Bills
The Central Bank of Nigeria (CBN) repriced spot rates on Nigerian Treasury bills with 91-day and 364-day maturities at the primary market auction on Wednesday, details from the primary market auction conducted on Wednesday revealed. Meanwhile, the discount rate on treasury bills with 182 days to maturity was steadied amidst significant subscription record
Offer
The authority floated N230 billion worth of Nigerian Treasury bills across standard tenors to replace maturing papers. The Apex bank offered 91-day treasury bills worth N50 billion for subscription at the main auction. For mid-tenor, or 182-day-to-maturity bills, the CBN offer size was N30 billion, while one-year treasury papers worth N150 billion were offered for subscription.
Demand
Details from the auction results revealed that total subscription settled at N396.42 billion, 1.72x total offer size of N230 billion floated at the auction. Amidst strong appetite for duration, investors undersubscribed Nigerian Treasury bills with lower tenors.
The CBN received N10.9 billion in subscription for Nigerian Treasury bills with 91-day maturity, underperforming the offer size of N50 billion. Investors staked N29.35 billion on Treasury bills with 182-day maturity versus an offer size of N30 billion.
Demand for 364-day bills totalling N356.18 billion at the auction board outpaced the total offer of N150 billion floated by the Apex Bank.
Allotment
The CBN allotted N7.70 billion worth of Nigerian Treasury bills with 91 days maturity to investors at the spot rate of 15.35%, an increase of 35 basis points from the 15% sell rate at the previous auction.
With a N27.70 billion allotment, the spot rate for Nigerian Treasury bills with 182 days maturity was unchanged at 15.50%, in contrast to fixed income market analysts’ prediction after mild repricing at the previous auction.
The CBN accepted N268.38 billion out of N356.18 billion staked on 36-day treasury bills paper at the auction at the spot rate of 17.44% at the midweek auction, translating to a 94-basis-point increase from the previous rate of 16.50%. #CBN Selectively Hikes Interest Rates on Nigerian Treasury Bills Equity Investors Lose N1.33trn as Dangote Cement, Oando Plunge
