The latest treasury bill auction in Nigeria on August 9, 2023, saw investors submitting bids worth N808 billion for one-year bills at an interest rate of 9.8% per annum. However, only N148 billion was allocated, indicating the persistent trend of over-subscription to these short-term risk-free investments.
The auction report revealed that the one-year bill in question will mature on August 8, 2024, providing insights into the market’s sentiment and demand for these securities.
Despite the country’s inflation rate rising to 22.79% in June 2023, a 0.38% increase from the previous month, investors continue to display a robust interest in risk-free investments. This is evident even as these investments offer a negative real return of -13%.
Opinion: The ongoing high demand for Nigerian treasury bills, despite the negative real return and inflation challenges, underlines the cautious approach investors are taking amid market uncertainties, seeking stability over higher returns.
The demand persists despite a negative real return, reflecting a cautious approach in uncertain economic times.