The Nigerian Treasury Bills auctions on Wednesday revealed that the country’s 364-day bill has remained level standing at 4.02% since the past 90 days.
Brandnewsday gathered that the Stop rates decreased further for the 91day tenors and 182-day tenors, the 91-day bills had stop rates of 2.0% and 182-day bills went for 2.2%.
Reports confirmed that at the auction the Debt Management Office sold N4.4 billion on the 91-day paper, N7.8 billion on the 182-day, and N78.7 billion on the 364-day bill.
Michael Nwakalor, Macroeconomist at CardinalStone Research, in an exclusive phone interview with Nairametrics .com explained why investors oversubscribed Nigeria’s Treasury bills.
Nwakalor said: ”The descent in T-bill rates continued at yesterday’s auction as rates on the short and mid tenors declined further. Meanwhile, the 364-day bill closed flat at the auction.
”With subscription almost two times the offered amount, demand for short-dated notes remains popular in the relatively illiquid market as some investors opt to stay short amid uncertainties shrouding various macroeconomic variables.”
Basically, the CBN sells T-bills on a bi-weekly basis to investors and it is one of the safest investments available. Interests are paid upfront and the principal paid in full upon maturity.
Understanding these Bills: Basically, when the government goes to the financial market to raise money, it can do it by issuing two types of debt instruments – treasury bills and government bonds.
Treasury bills are issued when the government needs money for a short period, while bonds are issued when it needs debt for more than say five years. The issuance of treasury bills is also used as a mechanism to control the circulation of funds in the economy.
Stanbic IBTC Asset Management has implemented strong measures to safeguard its customers from an alarming…
Michael Owhoko, Ph.D The root cause of Nigeria’s problem is, unarguably, an inappropriate system of…
Stanbic IBTC Pension Managers has launched the third edition of their highly anticipated FUZE Talent…
Stanbic IBTC Holdings, a member of Standard Bank Group, has unveiled the fourth edition of…
Stanbic IBTC Pension Managers has again made a significant mark on Nigeria's cultural landscape by…
NOVA Bank, one of the latest commercial banks in Nigeria, may be experiencing a major…
This website uses cookies.