CBN plans N750bn Treasury Bills auction to tighten liquidity

The auction will heavily feature long-term instruments, with N100bn each for 91-day and 182-day Treasury bills, and N550bn for one-year paper. This initiative is part of the CBN's monetary policy to curb inflation and stabilize the naira, maintaining a hawkish stance with the Monetary Policy Rate at 26.50 percent. The aim is to absorb excess cash from the banking system, which often sees trillions of naira injected from maturing Open Market Operations bills and other government payouts.

Market analysts, including AAG Capital Limited, anticipate robust investor demand, especially for one-year Treasury bills, despite rising yields. The 364-day stop rate saw a 36 basis point increase in the previous auction, reflecting the government's borrowing strategy. In the last auction, the CBN offered N700bn, with subscriptions reaching N2.03tn, and allotted N1.06tn.

Stop rates were 16.30 percent for 91-day, 16.50 percent for 182-day, and 17.70 percent for 364-day bills, offering attractive true yields for fixed-income investors.