During its auction on July 24, the Central Bank of Nigeria (CBN) offered one-year Treasury Bills (T-Bills) at a stop rate of 22.1%. This action is a reflection of the central bank’s continuous attempts to control inflation and regulate liquidity in the economy.
The entire amount that the CBN offered in this auction, divided among the various tenors, was N277.96 billion, according to the auction result. Compared to the N229.72 billion offered at the last auction on June 26, 2024, this amounts to a 21.53% rise.
Together, these tenors subscribed for up to N373.95 billion, exceeding the amount offered and demonstrating the high demand and investor confidence in government securities.
Nonetheless, compared to the N774.98 billion total subscriptions reported in the preceding month, this represented a 51.68% decline.
The entire sales, or allotment, for the most recent auction was N277.96 billion, a slight decrease of 2.22% from the N284.26 billion allotted the previous month.
We also noticed that the sum awarded in the most recent auction is roughly equivalent to what was given in the previous sale.
Auction breakdown
The auction, held on July 24, 2024, offered three different tenors of Nigerian Treasury Bills (NTBs): 91-day, 182-day, and 364-day.
- For the 91-day T-Bills, the CBN offered an amount of N16.48 billion. The subscription for this tenor was N13.14 billion, which was fully allotted. The range of bid rates for these bills was between 16.0000% and 18.5000%, with the current stop rate set at 18.5000%, up from the previous stop rate of 16.3000%. This change represents an increase of 2.2000%, resulting in a true yield or return of 19.4125%.
- The 182-day NTBs had an offer amount of N6.44 billion, with subscriptions reaching N6.40 billion, slightly less than the amount offered. The total allotment matched the subscription amount. Bid rates for these bills ranged from 17.0000% to 19.5000%, with the current stop rate at 19.5000%, a rise from the previous stop rate of 17.4400%. This indicates a change of 2.0600%, providing a true yield or return of 21.6194%.
- The 364-day Treasury Bills saw the highest offer amount of N255.04 billion, with a subscription of N354.40 billion, as hungry-yield investors oversubscribed the one-year T-Bills. The allotment for these bills was N258.42 billion. Bid rates for this tenor ranged from 20.0000% to 26.7700%. The current stop rate was set at 22.1000%, up from the previous stop rate of 21.2400%, marking a change of 0.8600%. This resulted in a true yield or return of 28.3697%.
