CBN cuts 1-Year Treasury Bill rate, rejects Bids

Central Bank of Nigeria (CBN) cut the spot rate on its one-year tenor treasury bills by 138 basis points to 16.98% at the primary market auction on Wednesday.

At the auction, the authority offered Treasury bills worth N1.15 trillion for investors’ subscription across standard tenors. Demand was strong, with investors showing interest in long tenors amid rising appetite for duration.

The CBN underwrote its offer with total sales settling at N952.6 billion amidst spot rates repricing. 

Details from the main auction indicate that the total subscription printed at N4.586 trillion, and 96% of the aggregate bids was driven by investors showing interest in one-year bills.

Investors submitted N66 billion bids for 91 days Treasury bills, which was below N150 billion offered by the authority.  The CBN allotted N63.21 billion for the short tenor to investors at the old rate.

Subscriptions for 182 days bills came in at N123 billion, though offer size was N200 billion. The authority sold 182 days bill worth N80.61 billion, and maintained its discount rate.

Reflecting a strong appetite for long duration, investors chased N800 billion worth of Nigerian Treasury bills with one-year tenor, with N4.396 trillion in total subscription. The authority allotted N808.78 billion to investors at a lower rate.

The authority took advantage of higher subscription for 1-year bills, and cut the spot rate to 16.98% on Wednesday from 18.36% at the previous auction.
Discount rates on 91 days Treasury bills and 182 days short term investment securities were kept unchanged at 15.84% and 16.65%, respectively.