By Anastasia John E.
In a significant milestone for its ongoing reform efforts, the Central Bank of Nigeria (CBN), acting on behalf of the Debt Management Office (DMO), has announced an impressive 283.42% oversubscription, totaling N1.47 trillion for the 364-day Treasury Bills auction held today.
On January 6, 2025, the CBN outlined its plans to auction Treasury Bills with maturities of 91, 182, and 364 days, offering N50 billion, N80 billion, and N385 billion, respectively. The auction results revealed a remarkable demand, with subscriptions reaching N22.94 billion for the 91-day bills, N20.81 billion for the 182-day bills, and a staggering N1.47 trillion for the 364-day bills.
Bids for the Treasury Bills varied, with the 91-day bills attracting a stop-out rate of 18%, the 182-day bills at 18.5%, and the 364-day bills at 22.62%. Investors had the opportunity to purchase each bond unit for N1,000, with a minimum subscription of N5,000 and a maximum of N50 million.
The maturity dates for the Treasury Bills are set for April 10, 2025, July 10, 2025, and January 8, 2026, with the allotment date scheduled for January 9, 2024.
This surge in demand for longer-term securities reflects a broader trend amid rising interest rates. Following the recent increase in the Monetary Policy Rate by the CBN to combat inflation, which reached 33.88% in November, investors have shown a marked preference for high-yield government instruments like Treasury Bills as a safeguard against inflation.
The heightened interest is evidenced by a staggering 2,723% increase in demand for the 364-day bills, alongside a 725.4% rise in interest for the 91-day bills. Conversely, interest in the 182-day bills saw a decline of 77.9%.
