Central Bank of Nigeria (CBN) sold 252.88 billion naira worth in Treasury bills at an auction on Wednesday, offering a higher rate on the one year paper to lure investors and help mop-up excess liquidity from the money market.
Data from the bank showed that a total of 177.22 billion naira of the one-year bill was sold at a rate of 13.7 percent. It auctioned 6.09 billion naira of three-month debt at 12 percent and 69.57 billion naira of six-month maturity debt at 13.65 percent.
Total subscription stood at 355.2 billion naira at the auction where investors piled demand on the longer tenor paper due to attractive yield.
Traders said some offshore funds participated at the auction, helping boost dollar liquidity on the currency window for investors to keep naira rates stable.
CBN has maintained tightened liquidity in the domestic money market to attract foreign buyers.
Investors bid as high as 18.5 percent for the one-year paper. However, the government has been offering debt at lower yields to track declining inflation, which fell for the eleventh straight month in December, to 15.37 percent.
Debt Management Office (DMO) had said this week its plans to raise $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost.
It repaid 198 billion naira worth of treasury bills in December, instead of rolling them over, to lower costs.
It repaid 198 billion naira worth of treasury bills in December, instead of rolling them over, to lower costs.
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