CBN Headquarters Abuja
Central Bank of Nigeria (CBN) has increased its yields on Treasury Bills at its latest primary market auction as investor demand surged to more than three times the amount offered.
The auction, conducted through the Debt Management Office, offered ₦700 billion across three maturities.
The CBN allotted ₦1.243 trillion after total subscriptions reached approximately ₦2.16 trillion.
*_Auction breakdown_*
91-day bills: ₦150 billion offered. The stop rate rose by 10 basis points to 16.05% from 15.95% at the previous auction.
182-day bills: ₦50 billion offered. The stop rate increased by 5 basis points to 16.19% from 16.14%.
364-day bills: ₦500 billion offered. This tenor attracted ₦1.95 trillion in subscriptions, accounting for about 90% of total demand.
The CBN allotted ₦1.243 trillion at a stop rate of 16.35%, up 20 basis points from 16.15% previously.
The higher yields came despite the Monetary Policy Committee maintaining the benchmark Monetary Policy Rate at 26.5% at its last meeting.
Analysts attributed the strong demand to investors seeking relatively safe, naira-denominated assets amid prevailing macroeconomic uncertainties. They noted that the oversubscription reflects continued appetite for fixed-income securities.
Stock brokers assessment showed the one-year bill remained the preferred instrument due to its higher yield and longer duration.
The DMO conducts Treasury Bill auctions twice monthly on behalf of the CBN to manage short-term government borrowing and provide benchmark rates for the money market. Proceeds are used partly to refinance maturing bills and fund budget deficits.
The next primary auction is scheduled later this month. Market watchers expect yields to remain elevated in line with inflation trends and liquidity conditions.
