CBN Reduces Interest Rate on 364-Day Treasury Bills
The Central Bank of Nigeria (CBN) has lowered the interest rate on Nigerian Treasury bills with a one-year maturity, according to details from the primary market auction results.
This decision follows substantial investor interest, with N2.56 trillion staked against an offer of N600 billion for Treasury bills with a one-year tenor, as against aggregate subscription of N2.78 trillion recored.
On Wednesday, the CBN conducted a primary market auction, offering N850 billion in Nigerian Treasury bills across three standard tenors: 91 days, 182 days, and 364 days.
Specifically, the CBN placed N100 billion on the table for investors’ subscriptions during the auction. The total subscription reached N130.74 billion, exceeding the amount offered.
For the 91-day bills, the CBN allotted N130.74 billion to investors at a rate of 15.95%, maintaining the same discount rate as the previous auction.
In the mid-tenor category, the CBN offered N150 billion in 182-day bills. However, total subscriptions only amounted to N82.34 billion, falling short of the offer size. The CBN allocated N71.37 billion in 182-day bills to investors at a spot rate of 16.65%, the same as in the last auction.
For the 364-day bills, the CBN had a target of N600 billion but received overwhelming subscriptions of N2.567 trillion. Ultimately, N731.81 billion was allocated at a lower rate, reflecting a strategy to reduce borrowing costs.
The spot rate for Nigerian Treasury bills with a 364-day tenor was set at 16.72% per annum, slightly down from the 16.73% offered at the previous auction. CBN Mops Up Naira with $200 Million
Out of N2.78 trillion in investors’ subscriptions against the N600 billion offer, the total allotment was N933.92 billion, according to auction results released today.
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