Central Bank Trims Treasury Bills Rate by 0.37% as Investors Offer N1.5trn

By Dipo Olowookere

The stop rate of the 364-day treasury bills was slightly brought down by 0.37 per cent to 21.12 per cent from 21.49 per cent by the Central Bank of Nigeria (CBN) at the primary market on Wednesday.

The central bank tinkered with the rate amid appetite for the debt instrument, according to details of the exercise analysed by Business Post.

The apex bank auctioned N159.9 billion worth of the one-year paper to investors today but received bids worth N1.4 trillion, indicating the strong confidence subscribers have in the government to repay at maturity despite the economic headwinds in the country.

The range of bids was between 19.50 per cent and 29.00 per cent as investors gamble on the bank to maintain higher rates to lure foreign portfolio investors (FPIs), who have the needed Dollars to strengthen the Naira, which is gradually gaining stability at the foreign exchange (FX) market.

At the close of the auction, the central bank sold N150.9 billion worth of the tenor.

The apex bank was at the market today with N918.4 million worth of the 812-day maturity and like the 12-month bill, it was oversubscribed by investors interested in a shorter tenor.

Subscribers staked N49.7 billion on this paper during the session at a stop rate as low as 17.00 per cent and as high as 21.00 per cent.

However, the bank allotted N4.9 billion at 17.00 per cent, which is 1.00 per cent lower than the 18.00 per cent of the previous exercise.

It was observed that the 91-day T-bills received considerable subscriptions from investors on Wednesday, about 85.5 billion, higher than the N728.2 million brought to the market square by the central bank.

This tenor had a range of bid rates between 15.00 per cent and 19.00 per cent, but it cleared at 16.24 per cent compared with the previous 18.01 per cent, indicating that the CBN sliced it by 1.77 per cent after it sold N5.7 billion to successful subscribers.

From the analysis of the PMA, the central bank offered to sell N161.5 billion worth of treasury bills across three tenors on Wednesday, but got bids valued at N1.5 trillion, and allotted N161.5 billion.