One-year Treasury Bill Rate in Nigeria Down to 6.50%

By Dipo Olowookere

The stop rate of a one-year treasury bill in Nigeria is now 6.50 per cent compared with the previous rate of 6.99 per cent, which was two weeks ago.

On Wednesday, the Central Bank of Nigeria (CBN) auctioned some treasury bills at the primary market and because of the strong appetite for the maturity, the stop rate was sliced by 0.49 per cent.

Business Post had observed that subscribers bid for the tenor between 5.98 per cent and 10.00 per cent, with a huge amount staked on it.

Details of the exercise yesterday showed that N566.2 billion was staked on the 12-month investment tool, significantly higher than the amount the CBN intended to sell to investors, N138.0 billion.

At the close of the primary market auction (PMA), the central bank allotted N189.1 billion worth of the bill to subscribers and due to the interest in the 364-day tool, the rate was cut.

But for the two others, the 91-day and the 182-day bills, the stop rates were left unchanged when the exercise was brought to an end.

In fact, the subscriptions for the maturities were relatively low, which may have informed the decision of the apex bank to keep their rates intact.

From analysis, the CBN went to the market with N4.8 billion worth of the three-month bill and received bids valued at N4.9 billion and allotted N4.1 billion with a stop rate of 2.50 per cent. The range of bid rate was between 2.49 per cent and 5.50 per cent.

A look at the six-month tenor showed that the apex bank auctioned nearly N8.0 billion but the bids received were just a mere N3.8 billion and the bank allotted N3.0 billion with the rate at 3.50 per cent. The range of bid rate for this bill was from 3.50 per cent to 6.75 per cent.

The next sales will happen in two weeks’ time and from yesterday’s exercise, the central bank will most likely further trim the stop rate of the one-year bill.