CBN Slashes 364-Day Treasury Bill Rate Below 16%
The Central Bank of Nigeria (CBN) reduced the spot rate on 1-year treasury bills below 16% at the primary market auction on Wednesday due to excess subscription on the naira curve.
The Apex Bank opened Treasury bills totaling N1.15 trillion across standard tenors for investors’ subscription as part of efforts to refinance expiring bills totaling ₦765.89 billion.
Total subscription for all three tenors printed at about N4.274 trillion, and more that 95% of the aggregate demand was for 364-day treasury bills.
The Apex Bank raised N1.908 trillion, and rejected other excess bids, and the market expects those funds to filter into the secondary market on Thursday, resulting in yields pullback at the short, belly, and long end of the curve.
Amidst widening real interest rate on the naira curve, the monetary authority kept the discount rate on 182-day bills unchanged, having recorded the weakest subscription at the auction.
Investors staked N105.05 billion against N150 billion offer for 91 days, and 182-day bills attracted N93.75 billion subscription.
Investors chased N800 billion offer size for 364-day bills with about N4.075 trillion, reflecting sustained demand for duration at the main auction.
The auction results revealed that the CBN slashed the spot rate for 91-day bills to 15.80%, and 364-day paper was reduced to 15.90%. The discount rate on 182-day maturity was kept at 16.65%
In the secondary market, trading activity softened as investors focused on the auction held.
Activity remained thin across the curve with rates holding steady for most maturities amid balanced demand and supply dynamics. Selective buying interest was concentrated at the longer end, where the 04-Feb-27 bill declined by 15bps to settle at 15.40%.
Elsewhere, short- to mid-tenors closed unchanged as participants maintained a cautious stance. Consequently, the average benchmark rate eased marginally. #CBN Slashes 364-Day Treasury Bill Rate Below 16% Money Market: Overnight Rate Rises as System Liquidity Drops
