The Federal Government through the Central Bank of Nigeria has raised a total sum of N284.26bn in the latest Nigerian Treasury Bills auction.
Federal Government successfully raised N284.26 billion through the latest Nigerian Treasury Bills auction, reflecting continued investor interest in these low-risk instruments. This comes despite a significant rise in the government’s T-Bills debt, which reached N10.4 trillion between December 2023 and March 2024, marking a 60% increase in just three months.
The auction attracted significant investor appetite, with total subscriptions reaching N773.98 billion, far exceeding the N228.72 billion offered. This indicates strong demand from yield-seeking investors, providing a crucial funding source for the government’s short-term needs.
Key Points:
- Treasury bill auction raises N284.26bn, surpassing offer amount.
- Investor demand remains high, with subscriptions exceeding N773.98bn.
- Government T-Bills debt surges to N10.4trn (December 2023 – March 2024).
Treasury Bills vs Bonds:
While the recent bond auction fell short of its target, Treasury Bills continue to be a popular choice. Unlike bonds, T-Bills offer shorter investment terms and are typically considered risk-free as the government guarantees repayment. They also serve as a tool for the Central Bank of Nigeria (CBN) to manage the money supply.
Auction Breakdown:
The latest auction featured three bill tenors: 91-day, 182-day, and 364-day. All tenors saw significant oversubscription, highlighting investor confidence. The 364-day bills received the highest offer (N168.21bn) and subscription (N697.11bn), indicating a preference for longer-term investments with potentially higher returns.
Debt and Financing:
The surge in T-Bills debt reflects the government’s need for alternative funding sources. As they combat inflation through monetary and fiscal policies, issuing T-Bills helps cover short-term expenses.
Conclusion:
The strong demand for Nigerian Treasury Bills highlights their attractiveness to investors seeking safe, short-term investments. However, the rising debt level underscores the need for the government to explore a wider range of financing options.
