By Francis Ogwo
The information from the Treasury Bills auctions on Thursday revealed that Nigeria’s 364-day tenor dropped to 3.05%. This is just as Stop rates printed lower for the 91-day tenor at 1.09% and 182-day tenor, which went for 1.5%.
The Debt Management Office at the Treasury bill auction sold N2 billion on the 91-day paper, N8.385 billion on the 182-day, and N148.361 billion on the 364-day bills.
According to a Nairametrics source, “At the Primary Market Auction conducted by the DMO yesterday, N159bn was rolled-over across the standard maturities on offer with demand skewed towards the new 1-Yr paper.
“Stop rates on the short and mid-tenured maturities closed marginally lower than the preceding auction at 1.09% (↓1bps) and 1.50% (↓5bps) respectively, while the 1-Year paper remained unchanged at 3.05%,” the source added.
Note that the massive disparity between the subscriptions and the offers recorded suggests investors are willing to earn a negative real return, compared to the higher risk in other assets such as stocks and real estate.
Treasury bills are issued when the government needs money for a short period, while bonds are issued when it needs debt for more than, say five years. The issuance of treasury bills is also used as a mechanism to control the circulation of funds in the economy.
