CBN Eyes N162bn in Fresh T-Bills as N27bn Matures Wednesday
The Central Bank of Nigeria (CBN) is set to hold its second Treasury Bills auction this month on Wednesday, targeting a total offering of ₦162.02 billion, as ₦27.19 billion in existing bills approach maturity.
Market observers anticipate continued downward pressure on rates due to expected strong investor appetite.
The auction encompasses three tenors: 91-day instruments valued at N22.02 billion with anticipated yields of 17.84%-17.94%, 182-day papers worth N40 billion expecting 18.44%-18.54% returns, and one-year securities totalling N100 billion with projected rates of 18.84%-19.04%.
Market sentiment remains mixed heading into Wednesday’s primary auction, influenced by Nigeria’s consecutive monthly inflation deceleration. Previous auction results showed the 91-day tenor declining by 2 basis points to 17.98%, the 182-day bills remaining stable at 18.50%, and the 364-day securities dropping by 21 basis points to 19.35%.
Several factors suggest potential rate compression: abundant interbank liquidity, disinflationary trends, smaller bond issuance volumes, and robust demand coverage for Treasury Bills. However, the central bank’s continued supply of OMO instruments at 28% yields may influence pricing dynamics.
Analysts at AAG Capital Limited noted that elevated OMO yields create competitive pressure against one-year Treasury Bills for institutional investors, potentially constraining secondary market activity for instruments priced below 19%.
