The Central Bank of Nigeria (CBN) is set to open Treasury bills worth N700 billion for subscription at a primary market auction scheduled for Wednesday.
According to a financial market notice, the total offer will be distributed across standard maturities of 91 days, 182 days, and 364 days. Specifically, the CBN will offer N80 billion in 91-day bills, N120 billion in 182-day bills, and N500 billion in 364-day bills.
The upcoming auction follows a trend of rising spot rates observed in recent sales. In the last two auctions, spot rates increased across all maturities, with the 364-day bill peaking at 19.94%, while the 91-day and 182-day bills settled at 18.00% and 18.50%, respectively.
Market activity is expected to increase as a total of N1.18 trillion worth of Nigerian Treasury Bills are set to mature in the coming week. At last week’s main auction, the CBN offered N800 billion for subscription, attracting a demand of N902.04 billion. However, only N503.92 billion was allotted.
Following the auction, unmet bids spilled into the secondary market, boosting trading activity. However, liquidity constraints limited trading volumes, causing the average yield to decline to the 19% level.
Traders reported that the Nigerian Interbank Treasury Bills True Yield trended upward as investors sought higher returns. Analysts anticipate that investor sentiment will remain positive, with a gradual easing of average market yields.
Recent adjustments in spot rates reflect the CBN’s response to declining headline inflation and relatively high interest rates. Inflation remains a global concern, prompting central banks worldwide to adopt a hawkish stance to manage rising costs and inflationary pressures.
According to Cowry Asset Limited, inflationary pressures have shown signs of easing, with a downward trend in key indexes and monthly readings. This is attributed to a stable currency, potential market interventions, and seasonal effects.
Looking ahead, Nigeria’s headline inflation is expected to maintain its downward trajectory with minimal disruption, supported by high-base effects and a relatively stable local currency.
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