In the most recent auction on July 26, 2023, investors bid N384 billion in one-year Treasury Bills at an interest rate of 12.15 percent annually.
Due to investors’ continued oversubscription of the short-term risk-free investment, only N255 billion was distributed.
The information was gleaned from the most recent auction report for Nigerian Treasury Bills that were sold during the week that the one-year note matures on July 25, 2024.
expanding inflation
Nigeria’s inflation rate increased by 0.38% points from the previous month’s figure of 22.41% to 22.79% in June 2023.
The headline inflation rate was 4.19% points higher year over year than the 18.60% rate registered in June 2022.
Despite providing a negative real return of -10.64%, this indicates that there is a rising demand for risk-free investments.
As a result of the scarcity of investable assets, investors are forced to accept negative real returns in exchange for earning nothing and potentially losing up to 22.79% of their money to inflation, which is why holdings in treasury bills buttress a larger economic problem.
What You Need to Know
Additionally, investors put up N6.4 billion for the 182-day bill, but the apex bank was only able to distribute N1.3 billion, indicating a 392% oversubscription. Investors agreed to 8% as the interest or stop rate for the 182-day bill.
Investors offered N7.8 billion for the 91-day bill as opposed to the central bank’s N1.7 billion asking price. 6% was the interest rate.
The 91-Day bill, 182-Day bill, and 364-Day bills all have maturity dates of 26 October 2023, 25 January 2024, and 25 July 2024, respectively.
