Latest report from the Central Bank of Nigeria (CBN) on the results of the Treasury Bills auction offered on January 29 this year indicated that the 364-day treasury bill stop rate rose to 19% per annum, indicating a clear signal that the apex bank is moving towards a hawkish monetary policy.
Similarly, the 182-day and 91-day bills also rose to 18% and 12.2% respectively as analysts see the rate hike of the debt instruments as signaling a monetary policy move aimed at fighting the depreciation of the naira and the excess money supply to combat galloping inflation.
At the last auction on the 29th of January, the interest rates for the maturities were recorded at 5% for the 91-day bills, 7.15% for the 182-day bills, and 11.54% for the 364-day bills, respectively.
During the auction, a total of N1 trillion was offered but was oversubscribed as investors staked a N2.3 trillion on the offer.
An analysis of the subscription showed that the one-year bill on offer for N600 billion recorded a massive N1.8 trillion subscription out of which the CBN sold N908.7 billion, The higher-end bid of 29.9% was slightly higher than the December 2023 inflation rate.
The 91-days offer attracted N39.9 billion stake from investors compared to the N200 billion offered by the apex bank. While the range of interest rates bid was between 7% and 17.2%, the apex ban sold the N39.9 billion staked.
On the 182-days N200 billion offered by the CBN at the auction, investors undersubscribed the offer, staking just N76.8 billion on it. At the end of the auction exercise, the apex bank allotted only N51.3 billion. The range of bids was 4% to 19.9% while the stop rate was 18% for treasury bills.
