Nigeria: CBN Reduces Interest Rates on 1-Year Treasury Bills by 42.4 Basis Points to 20.7%

CBN Reduces Interest Rates on 1-Year Treasury Bills by 42.4 Basis Points to 20.7%
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In a recent development on April 12, 2024, the Central Bank of Nigeria (CBN) conducted a Treasury bills auction where it successfully sold N951.83 billion worth of bills. This figure represents a significant 42% reduction compared to the N1.64 trillion sold in the previous session on March 27. Notably, the yield on the 364-day Treasury bill decreased to 20.7%, down from 21.124%.

During this auction, the CBN put forth N149.64 billion in Treasury bills, comprising N2.78 billion of the 91-day bills, N3.02 billion of the 182-day bills, and a substantial N143.84 billion of the 364-day bills.

Despite the modest amount offered, the auction experienced an overwhelming demand, with an oversubscription rate of 1,119%. The total subscriptions reached N1.824 trillion against the N149.64 billion available.

Specifically, for the 91-day bills, subscriptions came in at N27.34 billion, soaring to 883.45% more than the N2.78 billion offered. These bills had subscription rates ranging between 15.00% and 17.50%, with the CBN settling the stop rate at 16.24%, unchanged from the March 27 auction.

The 182-day bills saw subscriptions of N27.27 billion, marking an 802.3% oversubscription. The bids for these bills were placed between 16.00% and 21.00%, with the stop rate also maintained at 17.00% from the previous auction. The CBN concluded sales of N22.67 billion for these bills.

The 364-day bills were the highlight with an impressive 1130% oversubscription, accumulating subscriptions of N1.77 trillion. The bids for these bills varied from 19.00% to 25.00%. The final stop rate was determined at 20.7%, leading to successful bids amounting to N902.03 billion.

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