CBN Lowers T-Bill Rate to 17.15% Amid High Demand

On August 28, 2023, the Central Bank of Nigeria (CBN) conducted a primary market auction where it lowered the stop rate for the 364-day Treasury Bill to 17.15%, down from 17.59% in the previous auction. Investors submitted N3.63 trillion for this bill, representing 95.9% of the total N3.79 trillion bids received across all maturities.

The CBN had offered N700 billion across 91-day, 182-day, and 364-day bills, allocating N100 billion to each of the shorter maturities and N500 billion to the one-year instrument. The auction saw total subscriptions exceed five times the amount offered, with the one-year bill attracting bids equivalent to 7.26 times the N500 billion offered.

Ultimately, the CBN allotted N638.19 billion, exceeding its initial offer by N138.19 billion, while only accepting about 17.6% of the bids for the one-year bill. Financial sector analyst Jimbe Asalor noted that the strong demand for the one-year instrument indicates investors' preference for locking in current yields over shorter terms.