The Central Bank of Nigeria (CBN) has significantly lowered interest rates on Treasury bills following a decline in the country’s inflation rate, prompting investors to increase their stake in naira assets.
At a recent auction, the CBN offered N700 billion worth of Treasury bills across 91-day, 182-day, and 364-day maturities.
Despite a liquidity shortage exceeding N1 trillion in the money market, investor demand remained high, with total subscriptions surpassing N2.4 trillion.
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The CBN ultimately allocated N774.13 billion in Treasury bills, with interest rates falling sharply. The 91-day bill dropped by 1% to 17%, the 182-day bill declined by 0.5% to 18%, and the 364-day bill recorded the biggest cut, falling by 1.89% to 18.43%.
This rate adjustment follows a drop in inflation to 24.48%, positioning it below the CBN’s benchmark interest rate of 27.50%.
As a result, investors are now benefiting from positive real returns on government securities.
With shifting economic policies and inflation trends, Nigeria’s financial market continues to evolve, drawing strong investor interest.
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