Nigeria’s 1yr T-Bill yields hit 25% after jumbo rate hike

Investors flocked to Nigerian government debt during a Treasury Bill auction yesterday, pushing the yield on the one-year paper to 25 percent, the highest in more than seven years.

The surge comes after the Central Bank’s hike in the benchmark interest rate by a record 400 basis points to 22.75 percent last week to curb inflation and stabilise the embattled naira.

The summary of the Nigeria treasury bills auction yesterday showed that the stop rate for the one-year bill jumped to 21.49 percent from 19 percent at the last auction.

The auction saw strong investor demand, with subscriptions for the long end exceeding N1.3 trillion, four times the N312.9 billion offered.

The stop rates on the middle and short-tenor bills witnessed a marginal increase, as the 182-day bills increased by 2.9 percent to 18 percent, while the 91-day bills increased by 1.4 percent to 17.24 percent.

The Central Bank of Nigeria sold all of its N14.1 billion and N10.5 billion auctions on short-term and middle-term bills respectively.