CBN to Auction N700 billion Worth of Nigerian Treasury Bills
The Central Bank of Nigeria (CBN) is scheduled to auction Nigerian Treasury bills totalling N700 billion to money market investors on Wednesday. The semi-monthly auction, which will be conducted by the Debt Management Office (DMO), would target subscriptions across standard tenors, traders said.
The offer would be split across the 91-day (N100 billion), 182-day (N100 billion), and 364-day (N500 billion) maturities. Given the prevailing high-interest-rate environment and investors’ continued preference for risk-free assets, analysts said they expect the auction to attract strong subscription levels.
Fixed income market analysts anticipate rates repricing to persist following a recent decline in headline inflation rate, and the decision of the Central Bank Monetary Policy Committee to keep the benchmark interest rate at 26.50%.
The market anticipates the authority to continue to transmit its elevated interest rate environment into fixed interest securities asset pricing to reflect the monetary policy conditions.
With about N3.8 trillion in excess funds in the financial system, subscription is anticipated to increase sharply above offer size, though separate analysts told MarketForces Africa that investors will continue to prefer long-duration papers.
Banks, pension fund administrators and other institutional investors are projected to channel excess money market liquidity to fund their investment in Nigerian Treasury bills at the scheduled midweek auction. #CBN to Auction N700 billion Worth of Nigerian Treasury Bills#Treasury Bills Yields Contract on Naira Asset Accumulation
