CBN to Reissue N124.88bn Maturing Treasury Bills Today

30-Day Treasury Bills Yield
Image Credit: Nairametrics

By Dipo Olowookere

Treasury bills valued at N124.88 billion would be reissued by the Central Bank of Nigeria (CBN) on Wednesday, October 14, 2020 (today).

Business Post reports that the debt instruments to be offered for sale to investors via the primary market auction (PMA) are maturing T-bills.

They will be reissued across three tenors by the apex bank at the value of N8.85 billion, N3.50 billion and N92.54 billion for the 91-day, 182-day, and 364-day maturities respectively.

As usual, the bills are expected to be oversubscribed by investors, who have continued to show a strong appetite for the segment of the fixed-income securities.

At the last exercise held on September 30, 2020, the CBN slightly reduced stop rate for the three-month tenor to 1.08 per cent from 1.09 per cent and lowered the rate for the six-month bill to 1.49 per cent from 1.50 per cent.

In addition, the central bank sliced the stop rate for the one-year instrument to 2.80 per cent from 3.05 per cent during the exercise, which had N348.3 billion staked on the N144.0 billion auctioned by the bank.

Today, observers are not expecting the apex bank to raise the stop rates of the treasury bills during the exercise because of the demand for the investment tool despite the low-interest rate and high inflation in the country.

Last month, the National Bureau of Statistics (NBS) said the inflation rate in the month of August increased by 13.22 per cent and tomorrow, the agency is expected to release the numbers for September and analysts are already projecting a rate closer to 14.00 per cent as a result of the high cost of food items in the country caused by flooding and insecurity in the north, where most of the food items are cultivated by farmers.

Investors have continued to show likeness for the fixed income market because it is a risk-free investment tool, unlike the stock market, which is highly volatile.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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