In its auction held on March 13, 2024, the Central Bank of Nigeria (CBN) successfully sold N161.5 billion worth of Nigerian Treasury Bills (NTBs), showcasing continued investor confidence in the country’s debt instruments.
The auction attracted significant interest from investors across various maturities, reflecting a robust appetite for Nigerian sovereign instruments.
Notably, the demand was particularly strong for longer-term bills, indicating investors’ pursuit of higher returns and willingness to engage in longer maturity profiles.
For the shortest tenure of 91 days, the CBN received subscriptions totalling N85.51 billion against an offer of N728.17 million, resulting in an allotment of N5.73 billion at a stop rate of 16.239%.
Similarly, the 182-day bills saw subscriptions worth N49.65 billion against an offer of N918.38 million, with the CBN allotting N4.92 billion at a flat top rate of 17.000%.
The most substantial demand was witnessed for the 364-day bills, with subscriptions reaching a staggering N1.36 trillion against an offer of N159.85 billion. Despite this overwhelming demand, the CBN allotted N150.85 billion at a stop rate of 21.1240%.
This variation in stop rates across tenors offers insight into investor sentiment regarding short-, medium-, and long-term economic outlooks. While the lower stop rate on the 182-day bill suggests anticipation of stable interest rates, the higher stop rate on the 364-day bill indicates a cautious stance towards potential future economic volatilities.
The CBN’s strategic move to tighten monetary policy through higher interest rates and substantial treasury bill auctions aims to curb inflation and stabilize the exchange rate, fostering a more balanced economic environment.
Overall, the successful sale of N161.5 billion in NTBs underscores the healthy trading environment in the Nigerian debt market, with investors strategically positioning themselves across different maturities to optimize their investment horizons.
