T-bills interest rates surge, subscription declines

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The interest rates on treasury bills witnessed an appreciation at the Primary Market Auction, which took place on Wednesday.

Stop rates improved across all maturities as investors’ demand for the security declined when compared with previous auctions.

Analysts said the increase in interest rates appeared to be as a result of the Monetary Policy Committee’s increase in the Cash Reserve Ratio.

The MPC had raised the CRR by 500 basis points to 27.5 per cent.

The Central Bank of Nigeria had offered N28.02bn on the 91-day tenor but received a total subscription of N53.17bn and allotted N49.84bn at 3.5 per cent, an increase from the last interest rate of 2.95 per cent.

The CBN said the range of bid rates on the 91-day tenor was between two per cent and 9.4 per cent while that of the 182-day tenor was between three per cent and 10.5 per cent.

A total of N54.59bn was allotted on the 182-day tenor at 4.5 per cent, compared with the last stop rate of 3.95 per cent.

The CBN recorded a total subscription of N57.78bn on the 182-day tenor while it had offered N33.68bn.

The 364-day tenor saw an undersubscription as investors’ interest declined.

The CBN had offered N167.93bn but received a total subscription of N152.71bn.

The range of bid rates was between four per cent and 15 per cent while the CBN allotted N123.20bn at 6.5 per cent, compared with the last stop rate of five per cent.

In a similar development, the Debt Management Office said it allotted N1.33bn savings bond.

The DMO said N454.35m was allotted on the two-year tenor bond at 7.14 per cent while N877.79m was allotted on the three-year tenor bond at 8.14 per cent.

It said it recorded 149 and 197 total successful subscriptions recorded on the two-year and three-year bonds.

According to the notice, the interest will be paid on April 15, July 15, October 15, 2020 and January 15, 2021.

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