Interest Rate on Nigerian Treasury Bills Shrinks 28bps
The discount rate on Nigerian Treasury bills with a 364-day tenor was slashed by 28 basis points at the primary market auction conducted by the Central Bank of Nigeria (CBN) yesterday.
The auction, which was conducted by the Debt Management Office (DMO) on behalf of the monetary authority, was significantly oversubscribed due to investors heightened appetite for the naira assets.
At the auction, the DMO offered N515 billion across the standard maturities, which include 91-, 182-, and 364-day tenors. Auction results revealed that total subscription came at N1.52 trillion, driven by surplus liquidity in the money market.
Fixed income market analysts said in separate notes that demand was concentrated on the 364-day paper, which accounted for 97% of total subscriptions. With a bid-to-cover ratio of 2.95x, the auction subscription level was higher than the previous auction’s ratio of 1.99x, reflecting strong investor interest, according to TrustBanc Financial Group Limited.
The DMO sold N515 billion to investors and other market participants like banks and pension funds managers as planned, with 92% allocated to the 364-day paper.
Stop rates for the 364-day paper declined by 28 bps to 22.62%, TrustBanc Financial Group said in a note, while rates for the 91-day and 182-day papers remained unchanged for the sixth consecutive auction.
Auction results revealed that the stop rates for the 91-day and 182-day papers settled at 18.00% and 18.50%, respectively. #Interest Rate on Nigerian Treasury Bills Shrinks 28bps Africa Prudential Hits 52-week High
