CBN’s July 2022 Treasury Bills Auction Records 23% Oversubscription

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The Central Bank of Nigeria’s Treasury Bills auction for a 364-Day tenor, which sought to raise N258.5 billion from investors, recorded an oversubscription of 22.7%, as interest rate rose to 7% compared to 6.07% recorded in the previous month.

This is according to the summary of the Nigerian Treasury Bills (NTBs) auction conducted on Wednesday 27th July 2022.

Specifically, the 364-Day tenor TB recorded a total subscription of N317.25 billion as against the N258.53 billion offer by the CBN, which gave the room for a final allotment of N261.33 billion at a stop rate of 7%.

It is worth noting that, despite the rise in the interest rate, increased inflationary pressure to 18.6% in June 2022 still means that the treasury bills printed a negative real yield of 11.6%. Meanwhile, the uptrend in the NTBs interest rate is following the hawkish move by the CBN, raising the benchmark interest rate to 14%, the second hike in the year.

CBN’s July 2022 Treasury Bills Auction Records 23% Oversubscription

The move was geared towards curbing the rising rate of inflation in the country as prices of goods and services hit record highs following galloping global inflationary numbers.

A further breakdown of the summary showed that the 91-day and the 182-day NTBs recorded an undersubscription of 16.1% and 60.3% respectively. The 91-day treasury bills recorded a total subscription of N1.86 billion as against the N2.22 billion intended debt raise, at a stop rate of 2.8%.

Also, the 182-day treasury bills recorded a total subscription of N1.4 billion in comparison to the N3.54 billion that the CBN intended to raise at a rate of 2.8%, representing an undersubscription of 16.1%.