By Dipo Olowookere
Treasury bills were auctioned to investors via the primary market by the Central Bank of Nigeria (CBN) on Wednesday, August 26, 2020 and according to details of the exercise, T-bills valued at N197.6 billion were put up for sale by the central bank spread across three maturities.
Business Post reports that N20.4 billion worth of 91-day bill, N31.7 billion worth of 182-day bill and N145.5 billion worth of 364-day bill were auctioned during the session, about N197.6 billion in total.
However, when the subscriptions were analysed, it was observed that the demand for the debt instruments across the maturities was high, though the one-year bill was undersubscribed by market participants.
For the three-month bill, investors staked N31.2 billion, while the six-month maturity received N56.4 billion subscriptions, with the one-year tenor getting N134.7 billion bids during the exercise.
Consequently, the apex bank raised the stop rates of two of the three bills to boost the demand for the debt instruments at the next primary market auction in September.
The CBN allotted N20.4 billion for the 91-day bill at a lower stop rate of 1.15 per cent versus the previous 1.20 per cent, while it allotted N55.9 billion of the 182-day bill at a higher rate of 1.80 per cent versus the previous 1.39 per cent and sold N121.7 billion worth of the 364-day bill at a higher rate of 3.34 per cent versus the previous 3.20 per cent.
Meanwhile, at the secondary market yesterday, the average yield of treasury bills declined by 0.08 per cent to 1.60 per cent as a result of the decline recorded by the four benchmark maturities tracked during the session.
The one-month bill dropped 0.02 per cent to 1.11 per cent from 1.13 per cent, the three-month bill lost 0.02 per cent to 1.40 per cent from 1.42 per cent, the six-month tenor fell by 0.02 per cent to 1.42 per cent from 1.44 per cent, while the 12-month tenor declined by 0.25 per cent to 2.46 per cent from 2.71 per cent.
