On July 24, the Central Bank of Nigeria (CBN) raised the stop rate for one-year Treasury Bills (T-Bills) to 22.1%, a move aimed at controlling inflation and managing liquidity. The auction offered N277.96 billion across various tenors, up from N229.72 billion in the June 26 auction.
Investor interest was high, with total subscriptions reaching N373.95 billion, though this was a 51.68% decrease from the previous month’s N774.98 billion. The allotment of N277.96 billion was close to the offered amount but slightly down by 2.22% from last month’s N284.26 billion.
The auction included 91-day, 182-day, and 364-day T-Bills. The 91-day T-Bills had a stop rate of 18.5000%, up from 16.3000%, yielding 19.4125%. The 182-day T-Bills saw a stop rate of 19.5000%, with a yield of 21.6194%. The 364-day T-Bills had the highest stop rate at 22.1000%, up from 21.2400%, yielding 28.3697%.
The CBN’s strategy to offer higher stop rates is designed to attract investors with competitive returns, helping to manage excess liquidity and address inflation concerns. The strong demand, especially for longer-term T-Bills, suggests confidence in Nigeria’s economic stability and financial markets.
Credit: Nairametrics (Text Excluding Headline)
