CBN Plans N161.5bn Treasury Bills Auction Today

The Central Bank of Nigeria (CBN) is scheduled to hold a Treasury Bills (T-Bills) Primary Market Auction (PMA) on Wednesday March 13.

Treasury bills (T-bills) are marketable money market securities that raise money for the Government and are also used as monetary policy tools by the Central Bank.

T-bills are short-term securities that mature in 1 year or less from their issue date. They are usually issued with 3-month, 6-month, and 1-year maturities.

At the PMA, existing T-Bills totalling N161.50 billion (N730 million, N920 million and N159.85 billion across the 91-day, 182-day, and 364-day instruments, respectively) will mature and be rolled over.

“In the upcoming auction, we anticipate rates to hover around current levels across all trio instruments. The lower offer amount may deter significant investor participation, which further supports our expectation.

“Nevertheless, it is essential to acknowledge the continued focus on liquidity management and the central bank’s commitment to ensuring that fixed income rates correspond with the prevailing yield environment. This concerted effort aims to sustain rates at attractive levels for investors,” said Meristem Wealth Management Limited ahead of the T-Bills auction.

At the previous auction, the CBN offered a total of N337.89 billion across the trio instruments at the last Primary Market Auction (PMA), 27.27 per cent higher than the N265.50 billion offered.

“Particularly noteworthy was the higher allotment amount for the 364-day instrument, which saw an 8.44percent rise to N1.29 trillion. 

However, despite expectations of higher yields at the auction, stop rates across all offered instruments—91-day, 182-day, and 364-day—experienced increases to 17.24 per cent, 18 per cent, and 21.49 per cent, respectively. 

This rise occurred amidst a lower subscription level of N1.656 trillion, compared to N2.24 trillion at the previous auction, indicating tighter system liquidity,” Meristem noted.