The Central Bank of Nigeria (CBN) successfully raised over N626 billion through an oversubscribed Treasury bills auction, as it continues efforts to manage liquidity within the financial market. The auction, conducted on Wednesday, witnessed increased spot rates across all maturities, reflecting the CBN’s strategy to attract demand amidst a market characterized by weak liquidity.
The auction, organized by the Debt Management Office on behalf of the CBN, garnered substantial interest from investors, with total bids amounting to N669.93 billion across the standard maturities. The CBN offered three categories of Treasury bills: 91-day, 182-day, and 364-day papers, with a noticeable preference for the longer-term 364-day bills.
According to analysts, a significant 97% of the total subscription focused on the 364-day Treasury bills, demonstrating strong investor confidence in the long-term securities. The overall bid-to-cover ratio stood at 1.30x, slightly below the previous auction’s ratio of 1.31x.
The CBN successfully allotted ₦626.33 billion, exceeding the initial offer of N513.43 billion by 22%. Local investors dominated the demand for the 364-day Treasury bills, which constituted the majority of the total allotment.
Spot rates increased across all tenors, with the 91-day and 182-day bills seeing a rise of 100 basis points each, moving from 17% and 17.5% respectively in the previous auction. The 364-day Treasury bills experienced a more substantial increase of 235 basis points, rising from 19.864%.
This auction highlights the CBN’s ongoing efforts to manage market liquidity and stabilize the financial environment by leveraging the attractive yields on Treasury bills to draw investor participation.