By Dipo Olowookere
The stop rate of the three-month treasury bill was further reduced at the primary market auction conducted on Wednesday by the Central Bank of Nigeria (CBN).
Business Post reports that the rate for the short-dated instrument was sliced by the apex bank to 2.95 percent amid sustained demand from investors, who put over 10 times of what the bank offered to sell to them.
The central bank went to the market with N225.45 billion worth of the debt instruments in three maturities, but received subscriptions valued at N367.64 billion.
A breakdown showed that N5.85 billion worth of 91-day bill, N26.60 billion worth of 182-day bill and N193.00 billion worth of 364-day bill were auctioned during the exercise.
However, the central received N52.20 billion for the 91-day bill, N87.93 billion for the 182-day bill and N277.51 billion for the 364-day bill from market participants.
For the allotment, the CBN sold what it initially offered to sell to subscribers at the exercise, which holds every two weeks.
However, the rates were cut across the three maturities with the 91-day tenor rate trimmed to 2.95 percent from 3.50 percent, 182-day instrument rate was reduced to 3.95 percent from 4.90 percent, while the 364-day bill rate was slashed to 5.09 percent from 5.20 percent.
Analysts have continued to emphasised that the treasury bills stop rates will continue to decline as long as demand keep moving up. T-bills are one of the investment tools in the fixed income market getting attention of investors because they are almost risk-free unlike the stock market, which is highly volatile.
Stop rates started moving down to single digit late last year when the central bank stopped investment in its OMO bills to make funds available to the real sector of the economy. Some months ago, T-bills rates were as high as 18 percent and it became the toast of investors, who got attracted by the high yield they were offering.
Adedapo Adesanya 
Modupe Gbadeyanka