The Central Bank of Nigeria (CBN) has sold one-year Treasury Bills (T-Bills) at a stop rate of 22.1% during its July 24 auction.
This move reflects the central bank’s ongoing efforts to manage liquidity and control inflation in the economy.
According to the auction result, the total amount offered by the CBN in this auction was N277.96 billion spread across the different tenors.
This represents an increase of 21.53% from N229.72 billion offered in the previous auction of June 26, 2024.
The total subscription amount for these tenors combined was up to N373.95 billion, exceeding the amount offered and reflecting strong investor confidence and demand for government securities.
However, this was a decrease of 51.68% from N774.98 billion total subscriptions recorded in the previous month’s auction.
At the latest auction, the total sales, or allotment, for the auction amounted to N277.96 billion, which is a marginal decline of 2.22% from the N284.26 billion allotted last month.
TheWitness further observed that the amount allotted in the latest auction is approximately similar to what was offered in the previous auction.
The auction, held on July 24, 2024, offered three different tenors of Nigerian Treasury Bills (NTBs): 91-day, 182-day, and 364-day.
The decision to sell one-year NTBs at such a high stop rate highlights the CBN’s strategy to attract more investors by offering competitive returns.
This move is anticipated to help the central bank manage excess liquidity in the banking system, which is a critical factor in controlling inflation.
The high subscription rate, particularly for the 364-day bills, reflects a preference for longer-term securities, likely driven by expectations of future economic stability and favourable returns.
The range of bids and the stop rates across the different tenors suggest competitive bidding, with investors keen on securing these government securities.