CBN Sells 91-day, 182-Day Treasury Bills at 1%, 364-Day at 2%

By Dipo Olowookere

The stop rates of treasury bills were significantly cut by the Central Bank of Nigeria (CBN) at the primary market auction (PMA) on Wednesday.

Business Post reports that two of the three maturities offered for sale by the central bank today cleared at 1.00 per cent, while the third tenor was sold at 2.00 per cent during the exercise.

Treasury bills valued at N124.89 billion were auctioned by the apex bank today to local investors at the primary market with N8.85 billion for the 91-day, N3.50 billion for the 182-day and N112.54 billion for the 364-day bills.

As expected, subscribers offered more than what the central bank was offering to sell to them, forcing it to prune the stop rates at the close of the sales.

It was observed that for the short-term instrument, N33.04 billion was staked on it, representing a subscription level of 373.33 per cent. The coupon rate for this was dropped to 1.00 per cent from 1.08 per cent at the previous exercise held two weeks ago.

For the mid-term tenor, investors bid N44.73 billion, indicating a subscription level of 1,278 per cent and the stop rate was dropped by the CBN to 1.00 per cent from 1.49 per cent.

For the last maturity offered for sale today, the 12-month bill, market participants staked N540.32 billion and this showed a subscription level of 480.11 per cent and the rate was sliced to 2.00 per cent from 2.80 per cent.

Business Post reports that the central bank eventually allotted N124.86 billion T-bills to subscribers after the exercise, slightly lower than the amount it brought to the market.

A breakdown of the allotment showed that N12.76 billion was allocated for the three-month bill, N4.50 billion was shared among subscribers of the six-month tenor, while N107.62 billion was sold to subscribers of the 364-day maturity.

From the look of things, the CBN might further reduce the stop rates at the next PMA, especially for the long-dated bill as investors continue to sustain their strong hunger for the nation’s treasury bills.

Over three years ago, the T-bills were purchased at nearly or more than 20 per cent and this was when the bank was trying to woo investors as a result of the recession the country slipped into in 2016.