Interest rates on Nigerian Treasury Bills (NTBs) have declined ahead of a significant auction by the Central Bank of Nigeria (CBN), where the government aims to raise N670 billion through the sale of new Treasury bills.
Demand for these short-term government securities has been high among investors in the secondary market, which is where previously issued Treasury bills are traded. The longer-term bills that mature in December and January particularly catch the attention of many.
Market experts at AIICO Capital Limited observed that investors are eager to buy, but those who already hold these bills are hesitant to sell, hoping for even lower yields before the auction.
As a result of this high demand, the average interest rate on NTBs in the secondary market dropped slightly to 23.27%. The most sought-after Treasury bills, maturing on December 25 and January 22, were trading at rates between 20.80% and 20.35%.
During the upcoming auction, the government will sell Treasury bills with three different maturity periods:
- 91-day bills (3 months)
- 182-day bills (6 months)
- 364-day bills (1 year)
Investors will have the chance to purchase government securities at attractive prices straight from the CBN through this auction.
