The Central Bank of Nigeria (CBN) cut interest rates on Nigerian Treasury bills as demand for the naira assets soared at the primary market auction on Wednesday.
The Debt Management Office (DMO) on behalf of the CBN auctioned N400 billion worth of bills across standard maturities midweek.
Results of the auction revealed that investors demand came strong, with total subscriptions reaching N1.54 trillion against the N400 billion offered. The DMO ultimately sold N714.38 billion, with stop rates declining across tenors – reversing previous auction trend.
Treasury bills with 91-day tenor fell 50 basis points to 18.00%, AIICO Capital Limited told investors in a note. Also, Treasury bills with 182-day tenor was priced down by 100 basis points to 18.50%, and rate for 364-day tenor dropped by 3 basis points 19.60%.
In Q1:2025, the CBN conducted eight Treasury Bills auctions, from seven in Q4:2024. This uptick was driven by an extra auction held in March, bringing the number of auctions for that month to four, instead of the usual three-per-month schedule at the end of a quarter.
Meristem Securities Limited said the move was likely influenced by the government’s increased borrowing needs, as well as an opportunity to take advantage of strong investors’ demand and the prevailing low borrowing costs.
The CBN offered a total of N5.15 trillion across the three maturities, N800bn uptick from the earlier disclosed N4.32 trillion issue, and a significant rise compared to N2.77trn offered in the preceding quarter.
