The Central Bank of Nigeria (CBN), acting on behalf of the Debt Management Office, has opened subscriptions for N1.05 trillion in Treasury Bills across three maturities, as investors position to capture higher yields amid easing inflation and improving real returns.
The apex bank conducted its third Treasury Bills auction for the month on Wednesday, against the backdrop of surplus liquidity in the financial system.
At the midweek primary market auction, Nigerian Treasury bills with a 91-day maturity worth N100 billion will be available to investors. In addition, the CBN is offering N150 billion in 182-day bills for subscription. One-year Treasury bills totalling N800 billion will also be opened for subscription, with rates expected to be repriced at spot levels.
The market anticipates strong demand for the midweek auction amid high liquidity in the financial system, said MarketForces.
At the previous auction, the CBN allotted N934 billion in treasury bills across standard tenors, out of total subscriptions of N2.78 trillion.
With ongoing disinflation, analysts expect the spot rate to decline as authorities move to reduce the central bank’s funding costs. Real returns have widened to 11.44 per cent, as the 26.50 per cent benchmark interest rate continues to outpace headline inflation of 15.06 per cent, a trend analysts say is driving the repricing of fixed-income securities.
At the last auction, the monetary authority trimmed the spot rate on 364-day bills to 16.72 per cent from 16.73 per cent. Discount rates for the 91-day and 182-day Treasury bills were unchanged at 15.95 per cent and 16.65 per cent, respectively.
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