CBN offers N700bn Treasury Bills for subscription on Wednesday

Central Bank of Nigeria (CBN) is set to open Treasury bills worth N700 billion to investors for subscriptions at the primary market auction scheduled for Wednesday. The total bills that will be offered to investors’ midweek is expected to be distribute across standard maturities of 91 days, 182 days, and 364 days, according to a financial market notice. Specifically, the CBN will offer 91-day bills worth N80 billion, 182-day bills worth N120 billion, and N500 billion, respectively. The last two auction sales saw an increase in spot rates across standard maturities.
Additionally, a total of N1.18 trillion worth of Nigerian Treasury Bills will mature in the coming week, driving activity levels. At the main auction last week, the CBN offered N800 billion to investors for subscription. However, demand reached N902.04 billion, but only N503.92 billion was allotted. Stop rates increased across all tenors, peaking at 19.94% for the 364-day bill, while the 91 and 182 days settled at 18.00% and 18.50%, respectively.
Post-auction, unmet bids spilled into the secondary market, boosting activity levels. However, trading volumes remained limited due to ongoing liquidity constraints. This caused average yield to decline to 19% level in the secondary market. Traders reported that The Nigerian Interbank Treasury Bills True Yield trended upwards as investors sought higher returns on their investments. Analysts said they expect investor sentiment to remain positive, with a gradual easing in average market yields. Spot rates were adjusted upward in the last two auction conducted by the authority amidst declining headline inflation and relatively high interest rate.
Inflation has remained a key issue globally, prompting many central banks to adopt a hawkish stance as rising costs and inflationary pressures continue to impact economies, Cowry Asset Limited said in an update. Analysts said they have observed a downward trend across all indexes and monthly readings, indicating a positive easing of inflationary pressures, driven by stable currency, potential market interventions, and seasonal effects. Looking ahead, Nigeria’s headline inflation is expected to maintain its downward trajectory with minimal disruption, mainly due to high-base effects and a relatively stable local currency.