The Central Bank of Nigeria (CBN) has concluded another round of Treasury Bills (T-Bills) auction, selling approximately N1.3 trillion worth of bills. The auction, held on March 6, 2024, featured bills offered across three different tenors.
The Summary of Auction Result revealed that the 364-day tenor attracted the highest interest rate, or stop rate, at an impressive 21.490%. With a maturity date set for March 6, 2025, this tenor garnered over N312 billion in offers, with subscriptions soaring to nearly N1.54 trillion. Notably, the CBN allotted the entire initial offer amount, indicating strong investor demand.
In contrast, the shorter tenors drew relatively lower interest rates, with the 91-day bills closing at a stop rate of 17.240% and the 182-day bills at 18.000%. The 91-day bills, maturing on June 6, 2024, received offers totaling N14.4 billion, oversubscribed by over N66 billion, while the 182-day bills, with an offer of N10.5 billion, saw subscriptions exceeding N51 billion. All offered amounts were allotted to bidders.
The bid ranges for the different tenors varied, with the 91-day bills having a range of 15.9000% – 22.0000%, the 182-day bills slightly narrower at 14.0000% – 22.0000%, and the 364-day bills with bids placed between 17.0000% and 27.0000%.
These results underscore the CBN’s efforts to manage liquidity and inflation by issuing treasury bills. The high stop rate of 21.490% on the 364-day tenor reflects the CBN’s proactive stance in controlling excess liquidity, potentially attracting more investors to government securities.
The decision to significantly increase the volume of treasury bills auctioned, particularly for the 364-day tenure, demonstrates the CBN’s commitment to addressing liquidity surplus in the economy. By absorbing excess liquidity, the CBN aims to counter inflationary pressures and stabilize the value of the naira, crucial for economic stability and growth.
