CBN Cuts Rates as Investors Bet N1.497bn on T-Bills
The Central Bank of Nigeria (CBN) slashed interest rates on Treasury bills during a midweek primary market auction (PMA) amidst high subscription levels from investors.
Authorised dealers and other market participants attempted to park large sums in Nigerian Treasury notes after spot rates soared across tenors at the previous auction.
However, the apex bank played down by making a low offer for sale to investors who expressed interest in the local borrowing instruments today.
Large rejected bids trickled through the secondary market, lowering the yield across the curve. At the auction, the Central Bank of Nigeria offered to sell N161 billion in conventional maturities of 91 days, 182 days, and 364 days.
Unlike previous auctions, both allotment and spot rates were reduced downward by the authority. Despite the higher subscription level received, the CBN allotted exactly what was on the offer list.
Investors submitted an N1.497 trillion bid at the auction. However, the apex bank sold bills worth N161 billion. Stop rates declined across maturities, with 91-day, 182-day and 364-day respectively.
Details from auction results showed that the rate on 91-day bills slid by 100 basis points to 16.24%. At the belly of the curve, the spot rate on 182-day bills declined by 100 basis points to 17%.
Also, the 364-day bill was slashed to 21.12%, down by 37 basis points from the previous auction. In the secondary market, investors’ sentiment remained bullish. #CBN Cuts Rates as Investors Bet N1.497bn on T-Bills
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