The Central Bank of Nigeria’s Treasury Bills auction for a 364-Day tenor, which sought to raise N258.5 billion from investors, recorded an oversubscription of 22.7%, as interest rate rose to 7% compared to 6.07% recorded in the previous month.
This is according to the summary of the Nigerian Treasury Bills (NTBs) auction conducted on Wednesday 27th July 2022.
Specifically, the 364-Day tenor TB recorded a total subscription of N317.25 billion as against the N258.53 billion offer by the CBN, which gave the room for a final allotment of N261.33 billion at a stop rate of 7%.
It is worth noting that, despite the rise in the interest rate, increased inflationary pressure to 18.6% in June 2022 still means that the treasury bills printed a negative real yield of 11.6%. Meanwhile, the uptrend in the NTBs interest rate is following the hawkish move by the CBN, raising the benchmark interest rate to 14%, the second hike in the year.
The move was geared towards curbing the rising rate of inflation in the country as prices of goods and services hit record highs following galloping global inflationary numbers.
A further breakdown of the summary showed that the 91-day and the 182-day NTBs recorded an undersubscription of 16.1% and 60.3% respectively. The 91-day treasury bills recorded a total subscription of N1.86 billion as against the N2.22 billion intended debt raise, at a stop rate of 2.8%.
Also, the 182-day treasury bills recorded a total subscription of N1.4 billion in comparison to the N3.54 billion that the CBN intended to raise at a rate of 2.8%, representing an undersubscription of 16.1%.