By Dipo Olowookere
The stop rates of treasury bills in Nigeria have been further slashed by the Central Bank of Nigeria (CBN), according to details of the primary market auction held on Wednesday.
Today, the apex bank offered T-bills valued at N150.7 billion for sale to investors at the primary market and as usual, the subscription level was high.
Business Post reports that N20.4 billion worth of 91-day bills were auctioned, N19.2 billion worth of 182-day bills and N111.1 billion worth of 364-day bills were auctioned by the CBN.
From the results of the exercise, the apex bank received N57.3 billion for the three-month tenor, N54.8 billion for the six-month maturity and N333.8 billion for the 12-month instrument, totalling N445.9 billion.
The central bank allotted the exact amount it auctioned for the respective bills but further reduced the stop rates.
According to the results, the 91-day bill was sold at 0.02 per cent, lower than 0.04 per cent at the previous exercise. The stop rate for the 182-day instrument was cut to 0.09 per cent from 0.15 per cent, while the rate for the one-year bill was slashed to 0.15 per cent from 0.30 per cent.
The implication of this latest development is that for an investor who buys the 364-day treasury bills worth N1 million, he will get N1,500 as profit for the investment, going by the 0.15 per cent stop rate.
However, if the investor opts for the 91-day bill and pumps the same N1 million in the tenor, he gets N50 as profit because the 0.02 per cent stop rate is per annum and the actual interest for the three months is derived by dividing the main rate by 4.
As it has always been stressed in the past by Business Post, the idea behind the CBN lowering the rates of the government debt securities is to discourage investment in the financial asset. The central bank wants more of the investment to go to activities that will create jobs and generate economic enterprises.
Adedapo Adesanya 
Modupe Gbadeyanka