The CBN’s N88 Billion Treasury Bill Auction Was 174.62 Percent Oversubscribed Yesterday

Yesterday, the Central Bank of Nigeria’s (CBN) Treasury Bills Auction, worth N88.46 billion, was 174.6 percent oversubscribed. The 91-day and 182-day tenor bills have stop rates of 2.00 percent and 3.50 percent, respectively.

According to the results of the NTB auction, the stop rate for the 364-day tenor bill was set at 9.75 percent.

The treasury bill auction was oversubscribed by 174.62 percent, resulting in a total subscription of N242.94 billion. T-bills worth N88.46 billion were issued through the 91-day, 182-day, and 364-day tenors at the primary auction.

Bills worth N129.46 billion were allocated to investors at the close of the auction.

Treasury Bills are in high demand.

In recent months, demand for Treasury Bills has risen as yield-hungry investors flee equities for risk-free government securities. Although investors were expecting ultra-low interest rates on fixed income securities such as Treasury Bills in 2020, yields have risen in recent weeks, surprising them.

With the naira’s inflation rate approaching 18 percent, the central bank appears to have been forced to change its monetary policy strategy, causing rates to rise.