The Central Bank of Nigeria (CBN) sold about N362.45billion from its latest Nigerian Treasury Bills (NTBs) as stop rate remained flat amid recent hike in inflation rate to 33.2per cent in March 2024.
The apex bank recorded an oversubscription of 254.23 per cent as investors’ total subscription stood at N531.billion from N142.57 billion total offered amount.
Investors sustained strong demand for the 364-day NTB when it was oversubscribed by 595.94 per cent to N725.66 billion from N121.77 billion offered.
The CBN allocation for the 364-day NTB stood at N333.98 billion after conducting its auction, reflecting heightened investor appetite amidst the current economic landscape.
For the 182-day NTB, the results revealed that its oversubscription grew by 104.09 per cent when investors subscribed N13.48 billion from the offered N12.95 billion, leaving the CBN to allocate N11.99 billion.
Finally, the 91-day NTB had an offering of N7.85 billion, but recorded a subscription of N18.7 billion with the CBN’s allotment at N16.48 billion.
The 91-day NTB has the second-highest subscription of about 238.36 per cent.
The stop rate on the 91-day, 182-day and 364-day NTBs remained flat when compared to the NTBs auction of April 19, 2024.
The auction results showed that the stop rate for 364-day stood at 20.7000 per cent, 82-day NTB at 17 per cent and 91-day NTB at 16.24 per cent.
The auction results, however, revealed that the bid range for 364-day stood at 19.0000-25.7600 per cent. Bid range for 182-day and 91-day NTBs was 15.0000-21.0000 per cent and 15.0000- 18.5000 per cent, respectively.
The CBN governor, Mr. Olayemi Cardoso had promised investors higher rates as apex bank tackled inflation rate.
On the backdrop of rising inflation, the Monetary Policy Committee of the CBN raised the interest rate or Monetary Policy Rate (MPR) by 200 basis points to 24.75per cent from the previous 22.75 per cent.
Also, with an inflation rate of 33.2 per cent as of March 2024, a stop rate of 21.12 per cent for the 364-day bills is indicative of a negative yield of about 12.5 per cent.
Meanwhile, the overnight lending rate contracted by 298 basis points to 28.4 per cent following the FAAC disbursement (N777.11 billion) for March.
Proceedings in the NTBs secondary market sustained its bullish momentum, as the average yield fell by 260bps to 22.5 per cent.
Across the curve, the average yield declined at the short (-100 basis points), mid (-524 basis points) and long (-202 basis points) segments driven by bargain hunting for the 91DTM (-591 basis points), 105DTM (-573 basis points) and 196DTM (-432 basis points) bills, respectively.
Also, the average yield contracted by one basis point to 18.8 per cent in the OMO segment.
Sentiment in the FGN bond secondary market was bullish, as the average yield pared by one basis point to 18.9 per cent.
Across the benchmark curve, the average yield expanded slightly at the short (+1 basis point) end following mild sell-offs on the JAN-2026 (+1 basis point) bond but declined at the mid (+6 basis points) segment as players demanded the JUN-2033 (-24 basis points) bond. Elsewhere, the average yield was unchanged at the long end.
