The final issuance of Nigerian Treasury bills for 2023 witnessed an overwhelming show of investor confidence as the Central Bank of Nigeria (CBN) recorded an astonishing oversubscription of N970 billion during the December market auction.
Despite the CBN offering N67.02 billion in treasury bills, the subscription soared to an impressive N1.037 trillion.
However, only N317 billion was allotted as the CBN adhered to stop rates of 7 per cent, 10 per cent, and 12.24 per cent for the 91-day, 182-day, and 364-day tenured bills, respectively.
· The 91-day bills, maturing on March 28, 2024, had an offering of N1.747 billion but recorded an oversubscription of N17.060 billion, with bids ranging from 3.3 per cent to 17.01 per cent. The allotted amount was N17.607 billion at a 7 per cent stop rate.
· The 182-day bills, maturing on June 27, 2024, had an offering of N17.156 billion, experiencing an oversubscription of N19.726 billion, with bids ranging from 6.5 per cent to 13.3 per cent. The allotted amount was N30.671 billion at a 10 per cent stop rate.
· The 364-day bills, maturing on December 26, 2024, were the most subscribed instrument, with an offering of N48.115 billion and a subscription of N968.2 billion, resulting in an oversubscription of N920.09 billion. Bids ranged between 9.87 per cent and 17.97 per cent, and the allotted amount was N268.74 billion at a 12.24 per cent stop rate.
The significant oversubscription indicates a robust eagerness among investors to engage in Nigerian Treasury bills, attributing this trend to the perceived safety and attractive yields compared to other investment options.
Looking ahead to 2024, these figures are anticipated to influence the inflation rate and system liquidity. The CBN’s strategic management of rates, amidst the oversubscription, suggests an effort to strike a balance between borrowing at favorable rates and addressing inflationary pressures—a top priority for the bank in the coming year.
The month-by-month decline in Treasury bill yields is seen as a positive indicator of the CBN’s effective regulation of system liquidity and market conditions.
However, sustaining this trend while navigating economic growth and stability remains a nuanced challenge for the central bank. The coming year is poised to test the CBN’s ability to maintain equilibrium in the financial landscape.
