Investors bid N808 billion worth of one-year treasury bills in the latest auction of 9th August 2023 at a rate of 9.8% per annum.
However, only N148 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 mature on 8th August 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 continues to be a growing demand for risk-free investments despite offering a negative real return of -13%.
What You Should Know
Investors also staked N14.8 billion for the 182-day bill, however, the apex bank was only able to allot N1.3 billion suggesting a more than 10x oversubscription rate. Investors accepted an interest rate or stop rate of 5.9% for the 182-day bill.
For the 91-day bill, investors bid N13.8 billion as against the N4.5 billion offered by the central bank. The interest rate was at 5%.
The maturity date for the auction is 9th November 2023 for the 91-Day bill, 8th February 2024 for the 182-Day bill, and 8th August 2024 for the 364-Day bill.