Investors are bracing for a possible hike in spot rates as the Central Bank of Nigeria (CBN) prepares to conduct its midweek primary market auction of Nigerian Treasury Bills.
The auction, scheduled for Wednesday, will cover the usual 91-day, 182-day, and 364-day tenors. The Debt Management Office (DMO) will coordinate the exercise, with market watchers expecting rates to reprice in line with the attractive yields already being offered to offshore investors through CBN’s OMO instruments.
In total, ₦480 billion worth of Treasury Bills will be offered across maturities, with ₦50 billion allocated to 91-day notes, ₦80 billion to 182-day notes, and ₦350 billion to 364-day notes.
AAG Capital Limited, in its commentary, projected higher cut-off rates due to the volume on offer, suggesting that the DMO could allot as much as ₦450 billion on the one-year paper alone. Analysts also noted that yields on the shorter end of the curve have shifted upward by 150 basis points in the past month, following renewed OMO issuance from the CBN.
With the policy rate still fixed at 27.50% and inflationary pressures persisting, analysts maintain that Treasury Bills remain less attractive to domestic investors.
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