The discount rate on Nigerian Treasury bills declined during the latest primary market auction conducted by the Debt Management Office (DMO) on behalf of the Central Bank of Nigeria (CBN), reflecting a surge in demand on Wednesday.
The auction garnered significant interest in the one-year (364-day) Treasury bill, while bids for shorter tenors, including the 91-day and 182-day bills, remained subdued. The DMO initially offered ₦583.25 billion in standard maturities to investors seeking risk-free instruments.
Investor appetite for naira-denominated assets was evident in the auction results, with total subscriptions reaching an impressive ₦2.55 trillion. This included bids for the 91-day, 182-day, and 364-day bills.
A breakdown of the auction revealed that 99% of the total subscriptions were directed toward the 364-day bill, which recorded a bid-to-cover ratio of 4.37x—more than double the 1.93x ratio observed at the previous auction.
In response to this strong demand, the DMO allocated ₦756.70 billion across the three maturities, significantly exceeding the initial offer of ₦538.25 billion. Of this amount, the 364-day bill accounted for a substantial 98% of the total allotment.
The stop rate for the 364-day paper dropped by 57 basis points, decreasing from 23.50% at the prior auction to 22.97%, signaling a decline in yields.
Exchange Rates Unchanged for Short and Mid-Tenor Bills
Meanwhile, the stop rates for the shorter tenors, the 91-day and 182-day bills, remained steady, reflecting no change in rates at the close of the auction.
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