LAGOS – The Central Bank of Nigeria hiked the stop rate for its one-year Treasury Bill to 17.70 percent at Wednesday’s primary market auction, yielding a true mathematical return of 21.51 percent.
This aggressive pricing forms part of the apex bank’s intensifying monetary tightening campaign aimed at draining excess cash from the banking system and anchoring stubborn inflationary pressures.
Investors responded robustly to the higher yields, pouring a massive N1.86 trillion in total subscriptions into the 364-day paper, significantly outstripping the government’s initial offer size.
The single-day subscription surge was driven by N2.21 trillion in maturing Open Market Operation bills that hit the interbank financial system just 24 hours prior to the primary auction.
By adjusting the longest-tenor stop rate upward from 17.34 percent, the central bank successfully incentivized institutional investors to lock down volatile capital for a full calendar year.
This liquidity management strategy follows a massive N1.9 trillion OMO bill sale on Tuesday, where the central bank cleared short-term stabilization securities at rates as high as 21.90 percent.
Market analysts note that the central bank’s aggressive stance gives investors significant leverage, especially given a heavy third-quarter domestic issuance calendar tracking N5.8 trillion against lower maturities.
