CBN to open N1.15trn treasury bill for subscription

Central Bank of Nigeria (CBN) will open treasury bills for investors’ subscription on Wednesday with a total offer size of N1.15 trillion.
The authority, through the Debt Management Office, will offer Nigerian Treasury bills with 91, 182, and 364 days’ expiration to investors after the inflation rate.

These standard tenors offer size is split as N150 billion for 91-day bills, N200 billion for 182-day bills, and N800 billion will be put out for subscription for investors with interest in 364-day bills.

The market anticipates excess subscriptions will persist, supported by strong liquidity levels in the financial system.

There is currently over N4 trillion in excess liquidity that is chasing money market instruments, however, the midweek N1.15 trillion Treasury bills auction is likely to absorb a sizeable portion of liquidity, potentially moderating system balances post-settlement. Also, the market expects N765.89 billion inflow from matured treasury bills during the week.

In the absence of aggressive OMO bills sterilisation, interbank rates are projected to remain broadly stable around current levels. Spot rates expectation will be anchored on the inflation figure released by the statistics office ahead of the midweek auction.

The Nigerian Treasury secondary market closed on a bullish note, with average benchmark yield declining marginally by -1bp w/w to close at 17.62%. Similar proceedings played out in the secondary OMO market as average benchmark yield declined by -57bps to close at 20.63%.