N139.9bn One-year Treasury Bill Attracts N345.2bn from Subscribers

November 24, 2022
PMA treasury bills

By Dipo Olowookere

The sale of treasury bills conducted by the Central Bank of Nigeria (CBN) on Wednesday, November 23, 2022, was oversubscribed by investors, thanks to the one-year instrument.

According to details of the exercise obtained by Business Post, the 364-day bill was the most attractive to traders during the session.

The central bank went to the market with N139.9 billion worth of the tenor but received subscriptions valued at N345.2 billion as a result of its attractive rate, which is closer to the benchmark interest rate.

It was observed that the bank allotted N199.9 billion worth of the 12-month instrument at the close of business, with the stop rate clearing at 14.84 per cent, 0.85 per cent higher than the 13.99 per cent offered in the preceding exercise, which was two weeks ago.

Several analysts had predicted that the CBN would increase the stop rate of T-bills yesterday as a result of the raising of the Monetary Policy Rate (MPR) by 100 basis points to 16.5 per cent and inflation hitting 21.09 per cent in October 2022, according to the National Bureau of Statistics (NBS).

A look at the other two maturities offered for sale during the primary market auction (PMA) on Wednesday showed that the stop rates were unchanged.

It was also observed that the tenors were undersubscribed by investors, ostensibly due to the low stop rates of the bills.

The apex bank auctioned N32.3 billion worth of the 91-day instrument yesterday but received bids valued at N12.0 billion, with N11.7 billion sold at 6.50 per cent.

Also, the central bank offered for sale N41.3 billion worth of the 182-day bill to traders during the session and got subscriptions worth N3.1 billion, with N1.8 billion allotted at 8.05 per cent.

Dipo Olowookere

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 [email protected]

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