CBN OFFERS N900BN TREASURY BILLS AT OCTOBER AUCTION

The Central Bank of Nigeria will offer N900bn worth of Treasury bills at the first auction of the fourth quarter, with the one-year instrument accounting for N700bn of the total.

The auction, being conducted on behalf of the Debt Management Office, will comprise N100bn in 91-day bills, N100bn in 182-day bills and N700bn in 364-day bills.

The auction is scheduled for Wednesday, with settlement set for Thursday, October 8.

The one-year instrument represents 77.8 per cent of the total amount on offer, reflecting the government’s emphasis on longer-dated Treasury bills.

The auction comes as Treasury bill yields have declined following the CBN’s recent 350-basis-point reduction in the Monetary Policy Rate to 23 per cent.

At the previous auction on September 23, the 364-day Treasury bill attracted N4.09tn in subscriptions, accounting for about 97 per cent of total demand across the three tenors.

The stop rate for the one-year instrument fell by 73 basis points to 15.89 per cent, while the 91-day and 182-day bills cleared at 15.50 per cent and 15.80 per cent respectively.

The DMO allotted about N8.14tn through eight Treasury bill auctions in the third quarter, exceeding its N5.8tn target by 40.3 per cent.

The October auction will provide an indication of whether demand for government securities remains strong as yields continue to decline.