Abuja, Nigeria – Nigeria’s latest treasury bills auction has drawn significant investor interest, with total subscriptions reaching N3.22 trillion, reflecting strong appetite amid rising yields and tight monetary conditions.
The auction, conducted by the Debt Management Office (DMO) on behalf of the Central Bank of Nigeria (CBN) on February 5, saw overwhelming demand for longer-term securities, particularly the 364-day instrument, which accounted for 98% of total bids. The government subsequently made allotments on February 6.
According to auction results obtained by REPORT AFRIQUE, the Federal Government offered N670 billion across the three standard maturities: 91-day, 182-day, and 364-day bills. Investors showed a clear preference for the one-year paper, with subscriptions totaling N3.16 trillion against an initial offer of N500 billion.
High Demand Drives Yield Adjustments
Despite the massive demand, the stop rate for the 364-day bill dropped significantly by 148 basis points to 20.32%, suggesting increased investor confidence in longer-term securities. Meanwhile, 91-day and 182-day bill rates remained stable at 18% and 18.5%, respectively, marking the eighth consecutive auction without rate changes for short-term maturities.
Weaker interest in shorter-tenor bills was evident, as the 91-day bill attracted only N42.37 billion, falling short of its N50 billion offer. The 182-day bill saw an even greater shortfall, with N19.52 billion in bids against an offer of N120 billion. The trend indicates that investors are positioning for higher long-term yields, anticipating further monetary policy tightening.
Government’s Treasury Bills Allocation Strategy
A breakdown of allotments showed that the government carefully managed yields while aligning with investor demand. Of the total N670 billion allotted, the 364-day bill received N619.36 billion—representing 92% of total allocations—while N31.94 billion was assigned to the 91-day paper, and N18.69 billion went to the 182-day bill.
The outcome of the auction underscores the CBN’s ongoing liquidity management strategy, as the central bank continues to adjust interest rates to attract funds for government financing while addressing inflationary pressures.
Join our Channel...