Nigeria’s treasury bills draw N3.22tn from investors amid high yields
Nigeria’s treasury bills draw N3.22tn from investors amid high yields
CBN
By
Sami Tunji
Nigeria’s treasury bills auction has attracted a total subscription of N3.22tn, reflecting heightened investor appetite amid rising yields and tight monetary conditions.
The auction, conducted by the Debt Management Office on behalf of the Central Bank of Nigeria, saw significant demand for long-tenured securities, with the 364-day instrument accounting for 98 per cent of total bids.
The auction was conducted on February 5, while allotments were done on February 6.
According to the result of the auction obtained by Sunday PUNCH, the Federal Government offered N670bn across the standard maturities of 91-day, 182-day, and 364-day bills.
Investors showed a strong preference for the one-year paper, which received N3.16tn in subscriptions against an offer of N500bn, further reinforcing the attractiveness of longer-tenured securities in the current economic climate.
The total bid-to-cover ratio stood at 4.80 times, slightly higher than the 4.78 times recorded in the previous auction.
The results revealed a sharp drop in stop rates for the 364-day bill, which declined by 148 basis points to 20.32 per cent.
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Meanwhile, stop rates for the 91-day and 182-day bills remained unchanged at 18 per cent and 18.5 per cent, respectively, marking the eighth consecutive auction where rates on short-term tenors remained stable.
Despite the surge in demand for the 364-day paper, shorter-dated maturities experienced weaker interest.
The 91-day bill received N42.37bn in subscriptions, below the N50bn on offer, while the 182-day bill saw a significant shortfall, attracting just N19.52bn in bids against an offer of N120bn.
The muted demand for shorter tenors suggests that investors are positioning themselves for longer-term gains, preferring to lock in higher yields amid expectations of further monetary policy tightening.
A breakdown of allotments showed that the government matched investor demand closely while managing yields to balance market conditions.
A total of N670bn was allotted, with N619.36bn allocated to the 364-day bill, representing 92 per cent of total allotments, while N31.94bn was allotted for the 91-day paper and N18.69bn for the 182-day tenor.
The outcome of the auction highlights the CBN’s liquidity management strategy, as it continues to adjust interest rates to attract funds for government financing while mitigating inflationary pressures.
https://punchng. Com/Nigeria’s treasury bills draw N3.22tn from investors amid high yields/