CBN Increases 91-Day, 182-Day, 364-Day Treasury Bills Rates

By Dipo Olowookere

The stop rates of treasury bills across the three tenors have been increased by the Central Bank of Nigeria (CBN).

On Wednesday, the apex bank conducted the sale of the debt instruments at the primary market. It was held a day after the Monetary Policy Committee (MPC) of the bank announced keeping the Monetary Policy Rate (MPR) at 11.5 per cent.

At the PMA, the central bank increased by increased the stop rate for the 91-day bill by 0.05 per cent, raised the 182-day bill by 0.30 per cent and moved the 364-day bill higher by 0.50 per cent.

It was observed that the three maturities were oversubscribed, though the subscription level of the mid-term instrument was just marginally higher.

Business Post reports that N7.5 billion worth of the three-month instrument was auctioned by the apex bank, N54.6 billion worth of the six-month instrument was offered for sale and N125.2 billion worth of the 364-day instrument was put up for sale, amounting to a total of N187.3 billion.

When the bids were analysed, investors maintained their strong appetite for the short and long-term bills, with N20.2 billion staked on the 91-day tenor, N56.0 billion staked on the 182-day tenor and N213.5 billion staked on the 364-day tenor, totalling N289.7 billion.

However, the apex bank allotted N11.4 billion for the short-term bill, N47.5 billion for the mid-term bill and N123.1 billion for the long-term bill, amounting to N182.0 billion, N5.3 billion lower than the amount initially brought to the market for investors to buy.

In terms of the stop rates, the 91-day maturity rose from 0.50 per cent to 0.55 per cent, the 812-day maturity increased from 1.00 per cent to 0.30 per cent, while the 364-day maturity moved up from 1.50 per cent to 2.00 per cent.

It is not certain if the hike in the T-bills stop rates would be one-off, though there are strong indications that this action was just to make investors to sustain their huge demand for the debt instrument, especially after the inflation rate for December 2020 rose to 15.75 per cent.