It is worth noting that, despite the rise in the interest rate, increased inflationary pressure to 18.6% in June 2022; still means that the treasury bills printed a negative real yield of 11.6%. Meanwhile, the uptrend in the NTBs interest rate is following the hawkish move by the CBN; raising the benchmark interest rate to 14%, the second hike in the year.
The move was geared towards curbing the rising rate of inflation in the country as prices of goods and services hit record highs following galloping global inflationary numbers.
A further breakdown of the summary showed that the 91-day and the 182-day NTBs recorded an undersubscription of 16.1% and 60.3% respectively. The 91-day treasury bills recorded a total subscription of N1.86 billion; as against the N2.22 billion intended debt raise, at a stop rate of 2.8%.
Also, the 182-day treasury bills recorded a total subscription of N1.4 billion in comparison to the N3.54 billion; that the CBN intended to raise at a rate of 2.8%, representing an undersubscription of 16.1%.
It appears that public investors are more interested in the long-term instrument with a higher interest rate. However, the continuous huge participation in the market demonstrates Nigerians’ sustained interest in fixed-income securities, especially considering the high volatility experienced in the variable investment securities.