The Central Bank of Nigeria (CBN) has adjusted the stop rate on one-year Treasury Bills (T-Bills) to 21.889 percent in its latest auction held on August 7, 2024.
This is a minor reduction of 0.211 percent-points, or 0.95 percent from the previous auction’s rate of 22.1 percent.
However, the auction saw substantial participation, with a total subscription of N486.87 billion across three tenors.
This is an increase of 30.17 percent from N373.95 billion recorded in the previous auction held on July 24, 2024. This increase indicates a robust investor appetite for Nigerian Treasury Bills, especially the 182-day and 364-day bills.
Despite this strong interest, the total amount offered was notably lower compared to the previous month, indicating a cautious approach by the CBN.
The total amount offered in August was N216.09 billion, a decrease of 22.26 percent from the N277.96 billion offered in July.
Similarly, the total amount allotted in sales mirrored this decline, also reducing by 22.26 percent from N277.96 billion to N216.09 billion.
This uniform decrease in both the amount offered and the amount allotted may suggest a deliberate approach by the Central Bank to scale down the issuance and distribution of treasury bills.
The amount offered for 91-day bills in August 2024 saw a modest increase of 0.67 percent, rising from N16.48 billion in July to N16.59 billion.
The 91-day bills saw a substantial rise in total subscriptions by 66.19 percent, reaching N21.83 billion in August from N13.14 billion in July.
The total sales also followed this upward trend, increasing by 57.89 percent to N20.75 billion from N13.14 billion.
The stop rate for the 91-day bills remained stable at 18.5 percent, reflecting consistent investor yield expectations for short-term securities.
There was a substantial increase in the amount offered for 182-day bills in August, with a 697.65 percent rise from N6.44 billion in July to N51.35 billion.
The 182-day bills experienced the highest increase in total subscriptions, skyrocketing by 422.55 percent to N33.46 billion in August from N6.40 billion in July.
Total sales also saw a dramatic rise of 409.33 percent, amounting to N32.62 billion compared to N6.40 billion in the previous auction.
The stop rate remained unchanged at 19.5 percent. 364-Day Bills: Conversely, the amount offered for 364-day bills saw a reduction of 41.93 percent, decreasing from N255.04 billion in July to N148.15 billion in August.
The 364-day bills, while showing a 21.79% increase in total subscription to N431.58 billion from N354.40 billion, saw a decrease in total sales by 37.04 percent, falling to N162.72 billion from N258.42 billion.
The stop rate for the 364-day bills slightly decreased from 22.1 percent to 21.889 percent, suggesting a minor reduction in yield but still maintaining investor demand for long-term investments.