FPIs stage return as yield on 1yr Nigeria T-bill hits 23.45%

The yield on the one-year Nigerian treasury bill jumped to 23.45 percent at an auction Wednesday in what is a boost for foreign portfolio inflows into the illiquid foreign exchange market.

The one-year bill was oversubscribed to the tune of N1.87 trillion, three times more than the N600 billion that was offered.

Nigeria sold a record N1.8 trillion worth of Treasury Bills at the auction, nearly two times the N1 trillion on offer. That’s the highest amount of cash raised via TBills since the CBN started tracking data.

“With the true yield of the one-year bill at 23.45%, it is time for FPIs to come in,” a market source familiar with the matter said.

“Investors asking up to 29.94 percent for the one-year bill is an indication that N0.8 trillion wanted more than 19 percent discount because of inflation,” the source said.

The one year bill sold at a stop rate of 19 percent while the N200 billion each for the 182-day and 91-day bills had stop rates of 18 and 17.24 percent respectively.

In the last auction, the stop rate for the one-year bill was 11.54 percent while the 91-day bills and 182-day bills closed at 5 percent and 7.15 percent respectively.

Details later…