Increased appetite for one-year Nigerian treasury bills forced the Central Bank of Nigeria (CBN) to trim the stop rate at primary market auction (PMA) conducted on Wednesday.
Business Post reports that the rate was brought down by 0.13 per cent during the exercise by the bank to 22.80 per cent from the 22.93 per cent it cleared in the preceding PMA.
It was observed that investors showed significant interests in the tenor at midweek, though lower than the previous auctions.
At the session, the CBN brought to the market N256.5 billion worth of the 12-month bills but received bids valued at N888.4 billion, showing that subscribers were ready to lock their funds in the long-dated asset class.
However, at the close of the exercise, the central bank allotted N512.0 billion worth of maturity to investors after it cut the top rate, which some investors wanted as high as 28.00 per cent, according to details of the exercise obtained by this newspaper.
Unfortunately, the other tenors, the 91-day and 181-day T-bills, did not get the same attention as the 364-day maturity on Wednesday.
The apex bank was at the PMA with N10.8 billion worth of the three-month bills but only received bids valued at N8.8 billion, which was fully allotted to investors, but the stop rate was left intact at 18.00 per cent at the close of the exercise.
As for the six-month tenor, it recorded a slight oversubscription during the exercise after the central bank offered for sale N8.4 billion but got subscriptions worth N10.6 billion, though the allocation was lowered to N7.0 billion with the stop rate unchanged at 18.50 per cent.
At the primary auction on Wednesday, the CBN intended to sell treasury bills valued at N275.7 billion but ended up allotting N527.8 billion after receiving offers worth N907.8 billion, indicating strong demand for the government debt securities.