The Central Bank of Nigeria (CBN) has reviewed upward the FGN Treasury Bill (TB) rates after its Monetary Policy Committee retained the Monetary Policy Rate (MPR) at 26.5% at its 305th meeting held last month amid concerns about inflation hike in the economy.
At the first primary market auction in June, the apex bank, through Debt Management Office (DMO), offered N700 billion worth of TBs for subscription across standard tenor.
The auction circular showed that the Federal Government planned to raise N150 billion from 91-day bills, N50 billion from 182-day bills and N500 billion from 364-day bills.
As has been the trend in the government’s debt instruments offers in recent months, the TB auction recorded high subscriptions from investors who participated in the midweek session, including banks, pension funds, and other asset managers.
- Advertisement -
Data from the DMO indicated that total subscriptions value stood at about N2.161 trillion as investors’ appetite for the TB remained strong.
A breakdown of the TB subscription by tenors showed that TBs with 364-day tenors attracted N1.946 trillion from investors, accounting for 90% of aggregate subscriptions. The CBN allotted N1.243 trillion worth of one-year bills at a rate of 16.35%, representing a 20-basis-point increase from 16.15% at the previous auction.
Also, investors showed interest in 91-day TBs, with the spot rate closing at 16.05%, up from 15.949% at the previous auction. The CBN approved all subscriptions for the 91-day tenor Treasury bills, totalling N131.181 billion.
Similarly, the 182-day TBs worth N82.979 billion was sold at a spot rate of 16.19%, up from 16.14%.
Comparatively, the average yield on TBs in the secondary market contracted by 2bp to 17.45%, indicating minimal contractions across the curve: short (-1bp), mid (-1bp), and long (-2bp) segments, with notable demand for the 22-APR (-25bp) bill
