Nigeria Sells N74.83 Bln Treasury Bills At 1st Debt Auction In 2020 At Low Yields
Nigeria sold a total of N74.83 billion worth in short-dated Treasury Bills at its first debt auction in 2020, with returns on the debt note slipped further below the yields at the last auction in December.
The amount sold at the auction was 42.83 percent of the total subscription of N174.68 billion by investors at the auction.
At the last auction, the Central Bank of Nigeria (CBN) sold only N45 billion worth of Treasury Bills to investors.
The CBN on behalf of the Debt Management Office (DMO) sold N10 billion worth of 91-day paper, N20 billion of the six months bills and N44.83 billion of the 1-year treasury paper.
Yields on the debt instruments have consistently declined across board as the regulatory bank took steps to lower government borrowing costs.
The 91-day bill attracted 3.5 percent compared with 4.0 percent previously, the 182-day paper attracted 4.9 percent against 5.0 percent, while the 364-day bills was sold at 5.2 percent compared with 5.49 percent previously.
The one year paper attracted the most subscription of N105.90 billion, while the 91-day paper attracted N37.15 billion and the 182-day bill received N31.63 billion demand.
Nigeria sells treasury bills fortnightly as part of measures to borrowing short-term funds from the public to finance government operations ahead of revenue collections.
Also, the CBN uses the treasury bills sales as part of its liquidity control measures, to curb pressure on the local currency.
Analysts said the country’s short-dated debt instrument is becoming less attractive to investors as yield has fallen fall below the prevailing inflation rate.
Nigeria reported an inflation rate of 11.85 percent for the month of November, while the CBN benchmark rate is at 13.5 percent.