By Dipo Olowookere
Treasury bills worth N54.36 billion would be rolled over on Wednesday by the Central Bank of Nigeria (CBN) via the primary market, Business Post reports.
The value of the maturing debt instrument is lower than the previous exercise, which was N213.5 billion.
A breakdown showed that the central bank is auctioning N21.03 billion worth of the 91-day bill, N11.94 billion worth of the 182-day bill, and N21.39 billion worth of the 364-day bill.
Rates are expected to change, especially for the one-year instrument, with the two others anticipated to remain flat as the CBN also makes efforts to reduce borrowing costs.
At the previous exercise held two weeks ago, the apex bank left the stop rates of the short and mid-term bills intact but raised the rate for the long-term tenor by 0.85 per cent.
This was done because at the preceding PMA, the appetite was low due to a cut in the stop rate of the bill by 0.51 per cent, which did not go down well with investors. The bank made an amend at the next exercise, and the subscription rate jumped.
At today’s PMA, analysts project an oversubscription due to the limited maturing bills and the need for traders to key their funds into a more stable investment instrument.
The fixed-income market has been a better investment tool for investors in Nigeria lately because it is risk-free, and the returns are known at the point of investment, unlike the equity market.
Also, the return on investment (ROI) is more attractive than investments in stocks, especially at a time inflation is above 20 per cent.
