Following the Central Bank of Nigeria’s (CBN) decision to decrease the stop rate on one-year treasury bills for the second time this year, the average interest rate on treasury bills fell to 3.66 percent last week, as investor demand outstripped supply by 391 percent.
The Central Bank of Nigeria (CBN) auctioned Nigeria Treasury Bills (NTB) on behalf of the Federal Government (FG) last week, and according to Financial Vanguard, the central bank sold N98 billion worth of bills, down 32 percent from the N129.3 billion offered in the previous auction.
The CBN took advantage of the high demand for the 364-Day TBs by lowering the top rate to 5.2 percent, a reduction of 22 basis points (bpts) from the previous auction’s 5.72 percent. This is also the second consecutive drop in the one-year tuberculosis rate since the start of the year.
The CBN, on the other hand, kept the stop rates for 91-day and 182-day bills at 2.48 percent and 3.3 percent, respectively.
As a result, the average interest rate on the three tenors dropped to 3.66 percent, down from 3.73 percent in January’s auction.