CBN to Open Treasury Bills for Subscription as N799bn Mature
The Central Bank of Nigeria (CBN) is poised to open Treasury bills for subscription at the primary market auction on Wednesday to efficiently refinance maturing securities.
The auction circular showed the CBN plans to issue Treasury bills totalling ₦1.05 trillion across the standard tenors of 91, 182, and 364 days, in a proactive effort to address a substantial ₦799 billion repayment obligation arising from expired bills.
Investors are anticipating a total repayment of ₦31.18 billion for the 91-day bills, ₦18.32 billion for the 182-day bills, and a significant ₦619.36 billion for the 364-day bills.
In a note, Cowry Asset asserts, “Demand is expected to remain robust, especially for long-term instruments, as the recent reduction in the monetary policy rate (MPR) underscores expectations for a gradual easing cycle and an ongoing compression of yields in the short to mid-term.”
Last week, the CBN made a pivotal move by cutting the interest rate by 50 basis points to 26.5%, representing the first rate reduction after an extended period of tightening measures aimed at curbing inflation and stabilising market prices.
Furthermore, the Cash Reserve Ratio (CRR) was maintained at 45% for commercial banks and 16% for merchant banks, while the Liquidity Ratio was held steady at 30%.
Analysts believe that although the CBN is cautious about loosening its monetary policy, it continues to exercise strong oversight of system liquidity.
In the secondary market, trading closed on an optimistic note, with the average benchmark yield decreasing by 18 basis points week-on-week to 17.23%.
This decline reflects investor confidence and positive sentiment in response to the shift in monetary policy, signalling a favourable environment for short-term investment. Dangote Cement Hikes Dividend by 50% as Profit Spikes
