The Central Bank of Nigeria (CBN) is set to offer N480 billion in Nigerian Treasury bills for investors’ subscription at a primary market auction scheduled for Wednesday. The auction, which will be conducted by the Debt Management Office (DMO), is expected to see a strong level of subscription. The CBN plans to raise N450 billion across its standard tenors—91-day, 182-day, and 364-day—to replace expired instruments, with an anticipated N324.41 billion in maturities expected to boost liquidity in the financial system.
Analysts, however, hold differing expectations on the rates, citing the central bank’s recent open market operations (OMO) conducted at significantly higher rates. Last week, the CBN offered a total of N700 billion in OMO auctions but raised N1.19 trillion, with the stop rates settling at 26.49% and 26.50%. Fixed-income analysts are skeptical that the CBN will offer equally generous rates on the Treasury bills. Analysts at AAG Capital Limited stated in a note,
“We think the auction would close mixed, amid the current volatility in the market. However, we opine that demand for duration would persist at the auction.” The Treasury bills market has been quiet for most of the week, with activity primarily focused on select OMO and Treasury bills papers.
