CBN to hike rates on Treasury Bills after Bonds repricing

The Central Bank of Nigeria (CBN) will auction Nigerian Treasury bills for investors’ subscription on Wednesday with an upgraded offer size of N700 billion.

The authority will sell N100 billion worth of Nigerian Treasury bills that will mature for repayment in 91 days for investors who can only spare their money for three months.

The auction details also revealed that the CBN will sell N150 billion worth of treasury bills paper at the midweek auction, targeting investors seeking to invest for 18 days only.

Due to significant appetite for long duration, the CBN plans to offer N450 billion worth of Treasury bill that will expire in 364 days, targeting investors seeking to hold investment securities for one year.

In its latest round offer, the CBN has hiked the spot rate on 364 days local treasury bills from 16.04% to 17.95%, a significant repricing that happened in just two weeks.

This happened despite disinflation expectations. Spot rate on 91 days bills printed at 15.30%, and 182 days bills was priced at 15.50%. The market anticipates rates could be adjusted further on Wednesday following rates repricing by the Debt Management Office (DMO) at the bonds auction on Monday.

The authority increased spot rates on 5- and 7 years reopened bonds by 1.30% apiece even after the statistics office announced the headline inflation rate slumped to 14.45%. It appears the market is in the mood for rates adjustment as 2025 nears end.