Melvin Onwubuke
The Central Bank of Nigeria (CBN) has completed another round of Treasury Bills (T-Bills) auction, offloading about N1.3 trillion.
The auctions, which took place on 6 March 2024, saw the bills in three tenors being sold, according to nairametrics.
According to the Summary of Auction Result, the highest interest, or stop rate, was recorded for the 364-day tenor at a striking 21.490%.
The maturity date is set for March 6, 2025, and the offer was more than N312 billion, and the subscription jumped to almost N1.54 trillion.
The Central Bank of Nigeria has managed to allocate the same amount as the initial offer, demonstrating a strong appetite from investors who have become more and more active recently.
On the other hand, with 91 day bills closing at a stop rate of 17.240% and 182 day bills closing at 18.000%, the shorter tenor T bills attracted a lower interest rate.
The 91-day bills, maturing on June 6, 2024, saw an offer of N14.4 billion and received an oversubscribed interest of over N66 billion.
Similarly, the 182 day bills offered an offer of N10.5 billion and were subscribed to more than 51 billion naira. A maturity date of September 5, 2024 shall be fixed for these bills.
The range of bids for the different tenors varied, with the 91-day bills having a bid range of 15.9000% – 22.0000%, the 182-day bills slightly narrower at 14.0000% – 22.0000%, and the 364-day bills having bids placed between 17.0000% and 27.0000%.
These results show that the Central Bank continues its efforts to regulate liquidity and control inflation by issuing treasury bills. The CBN’s aggressive stance to limit the surplus liquidity, which could be seen as a move towards attracting more investors, is indicated by its very large stop rate of 21.490% for an 364 days tenor.
The Central Bank aims to reduce inflation and stabilize the exchange rate in order to foster a more balanced economic environment by tightening monetary policy through higher interest rates and larger treasury bill auctions.
