Yields on Nigerian T-bills fall on strong demand from offshore investors, naira firms

The Bull and the Bear

Yields on Nigerian Treasury bills fell by an average of 0.30 percentage points across the board at an auction amid renewed interest in the local market from offshore investors.
The central bank said on Thursday it had sold a total of 183.64 billion naira ($1.13 billion) worth of treasury bills with maturities ranging from three months to one year in Wednesday's auction.
The naira has stabilised since last month when the central bank further tightened liquidity to support the local currency, making Nigerian assets more attractive for offshore investors. 

The central bank hiked cash reserves requirement on private sector deposits with banks to 15 percent last month, from 12 percent previously in a bid to tighten liquidity and curb speculation on the naira.

In early morning trade on Thursday, the naira has firmed to around 161.50 to the dollar on the interbank market, its strongest since January 24, when it closed at 159.53 to the dollar.
In the auction, the bank sold 20.15 billion naira in 91-day treasury bills at 11.71 percent yield, against 11.90 percent at the previous auction on March 26.
A total of 43.49 billion naira worth of 182-day paper was sold at 12.84 percent, 0.34 percentage points below the previous auction's yield. The bank sold 120 billion naira worth of 364-day paper at 13.04 percent, down from a yield of 13.59 percent seen at a Feb. 19 auction.
Total subscription stood at 534.75 billion naira compared with 381.58 billion naira at the previous auction, while demand was heavier for one-year paper, which attracted a total of 381.37 billion naira at the auction.
Traders said some offshore investors bought more of the one- year paper.