Stop Rate Hits 23.50% as Investors Bid N1.1trn for N540.5bn One-Year T-Bills

By Dipo Olowookere

The treasury bills auction conducted by the Central Bank of Nigeria (CBN) on Wednesday recorded significant interest from investors, particularly for the one-year maturity.

This was because of the attractive rate offered by the bank, though far below the latest inflation rate of 33.88 per cent as reported by the National Bureau of Statistics (NBS) last Friday.

Business Post reports that the stop rate for the 12-month tenor of the treasury bills cleared at 23.50 per cent at the primary market auction at midweek, 0.50 per cent higher than the 23.00 per cent it cleared in the previous PMA.

It was observed that the central bank auctioned about N540.5 billion worth of the 365-day bills to the market participants but it received bids valued at about N1.1 trillion, with the bid range between 22.00 per cent and 28.00 per cent.

However, the CBN allotted only N640.7 billion worth of the tenor to investors.

The bank also auctioned other maturities of the T-bills during the exercise, though they did not receive the attention of investors, with the rates left unchanged.

According to details of the sales, N41.9 billion worth of the 91-day bill was brought to the PMA on Wednesday, but it was undersubscribed, with subscriptions valued at N35.4 billion, which the central bank honoured at the previous rate of 18.00 per cent.

In the same vein, the apex bank auctioned N28.5 billion worth of the 182-day instrument at the PMA, but it received bids valued at N18.9 billion, but the bank decided to allot N16.9 billion at 18.50 per cent.

Details of the exercise showed that the CBN was at the market with treasury bills valued at N610.9 billion, but received bids worth N1.2 trillion, and allotted N693.0 billion.