CBN to Offer N550bln Treasury Bills for Subscription
The Central Bank of Nigeria (CBN) will open Nigeria treasury bills worth N550 billion for subscription at the primary market auctionn (PMA) scheduled for Wednesday.
The offer, which includes 91-day, 182-day, and 364-day maturities, has been projected to attract strong investors’ attention, reflecting sustained demand for the naira assets.
However, analysts are projecting spot rates to taper further after a significant decline in the amount the authority allotted to investors while discount rates were tightened.
In April, the CBN raised N1.14 trillion, translating to a 59.64% monthly reduction compared with treasury bills auctioned to investors in March.
MarketForces Africa reported that the authority raised ₦2.82 trillion from a relatively oversubscribed primary market auction in March, reflecting strong appetite for the naira despite a shift in global sentiment.
To compensate for a significant reduction in Treasury bills sales, the CBN conducted two primary market auctions in April.
Last week, the CBN conducted an OMO auction on Tuesday, offering instruments worth N500.00 billion. The total OMO bills offered across standard maturities were split into N250.00 billion for the 329 day to maturity and N250.00 billion for the 350 day to maturity.
The OMO auction attracted strong interest, recording an oversubscription of ₦556.85 billion. Total subscription settled at N1.06 trillion, but the CBN allotted N804.85 billion.
The breakdown showed that N106.25 billion for the 329 day OMO bills was sold to investors. Also, the CBN allotted OMO bills worth N698.60 for investors that bid for 350 day to maturity. Stop rates closed at 22.69% (329-day) and 22.73% (350-day), anchoring market expectations.
On Friday, the Nigerian Interbank Treasury Bills True Yield (NITTY) curve reflected mixed movements across maturities. However, the average yield on Treasury bills rose by 21 basis points to 21.05%, indicating a modest uptick in short-term interest rates. #CBN to Offer N550bln Treasury Bills for Subscription#
