CBN Sets to Open N450bn Treasury Bills Auction for Subscription
The Central Bank of Nigeria (CBN) is set to conduct its first Treasury Bills auction for the month midweek with a total offer size of ₦450 billion, split across three maturities, according to a market update.
The auction, which has been projected to be oversubscribed, will effectively reduce the amount of liquidity level available in the financial system, and probably push money market rates higher in the absence of additional supporting inflows.
According to investment experts, the auction will be conducted by the Debt Management Office (DMO) on behalf of the responsible authority—across 91-day, 182-day, and 364-day treasury bill tenors.
The Apex Bank planned to raise N50 billion from Nigerian Treasury bills with 91 days to maturity. The offer circular showed that the CBN is expecting to raise N100 billion from treasury instruments with 182 days to maturity and N300 billion from one-year bills.
Analysts are projecting the spot rate on long-term bills to reduce with an expectation that subscription levels would remain stronger due to investors’ appetite for long duration. Meanwhile, trading activity was relatively quiet in the secondary market as most players stayed on the sidelines ahead of the midweek auction.
“The DMO is going into this auction stronger than the previous, which explains our expectations of lower yield on the 1-year paper as investors reinvest maturing funds, particularly non-bank investors excluded from the recent OMO auctions “, AAG Capital Limited said in a note. #CBN Sets to Open N450bn Treasury Bills Auction for Subscription June: The Golden Window to Invest in the Nigerian Exchange for Maximum Returns
