Breaking: Investors bid N384 billion worth of Treasury bills at 12.15% per annum

Investors bid N384 billion worth of one-year treasury bills in the latest auction of 26th July 2023 at a rate of 12.15% per annum. 

However, only N255 billion was allotted as investors continue to over-subscribe to the short-term risk-free investment.  

The data was obtained from the latest auction report for Nigeria’s treasury bills sold during the week which sees the one-year bill matures on 25th July, 2024. 

Rising Inflation 

Nigeria’s inflation rate rose to 22.79% in June 2023, representing a 0.38% points increase from 22.41% recorded in the previous month. 

On a year-on-year basis, the Headline inflation rate was 4.19% points higher compared to the rate recorded in June 2022, which was 18.60%. 

This means there is growing demand for risk-free investments despite offering a negative real return of -10.64%. 

Investor stakes in treasury bills buttress a wider challenge in the economy as the lack of investable assets forces them to accept negative real returns in exchange for earning zero and losing up to 22.79% in inflation on their cash.  

What You Should Know 

Investors also staked N6.4 billion for the 182-day bill, however, the apex bank was only able to allot N1.3 billion suggesting a 392% oversubscription. Investors accepted an interest rate or stop rate of 8% for the 182-day bill. 

Ffor the 91-day bill, investors bid N7.8 billion as against the N1.7 billion offered by the central bank. The interest rate was at 6%. 

The maturity date for the auction is 26th October 2023 for the 91-Day bill, 25th January 2024 for the 182-Day bill, and 25th July 2024 for the 364-Day bill.