Interest Rate on 364-Day Treasury Bills Drops, CBN Rejects Bids
The Central Bank of Nigeria (CBN) reduced the Treasury bills spot rate by 4 basis points to 17.66%, according to details from primary market auction results obtained by MarketForces Africa.
The authority opened subscriptions for N600 billion Treasury bills across standard tenors on Wednesday as part of an effort to manage surplus liquidity levels in the financial system.
The auction attracted N3.034 trillion in aggregate subscriptions, reflecting sustained appetite for Treasury bills investment by banks and other asset managers.
Investors’ bids for 364-day Treasury bills accounted for 95% of the total subscription recorded. Investors chased one-year Treasury bills with N2.871 trillion in subscriptions, more than seven times the total offer made available at the midweek auction.
In all, the CBN allotted about N1.191 trillion in treasury bills to investors across the standard tenors, which translated into 60% rejections of the aggregate subscriptions.
A breakdown by MarketForces Africa showed that 91-day bills worth N80.84 billion were sold to investors at 16.30%, the same rate as the previous auction.
Against both offer and subscription amounts, the CBN allotted N48.18 billion in 182-day treasury bills to investors at a rate of 16.50%, unchanged from the previous auction.
Representing about 37% of total demand, Nigerian Treasury bills with a 364-day tenor, worth N1.061 trillion, were sold to investors at a rate of 17.66%, 4 basis points below the 17.70% rate offered at the previous auction. Treasury Bills Yield Rises to 19.5% Ahead of Q2 Supply
