Nigeria’s Debt Management Office (DMO) sold a total of N265.94 billion across all three tenors of Treasury bills on offer against N468.25 billion total subscriptions from investors. The nation on Wednesday surprisingly increased marginally the yield on its 1-year Treasury bond at an auction, but dropped rates it sold the 3-month and 6-month tenor paper.
Demand for the debt on offer also reflected the increased liquidity in the money market, which has driven interbank rate down in the week to Wednesday. The debt office sold N161.52 billion worth of the 1-year debt at 3.40 percent, which was higher than the 3.35 percent a similar tenor paper was sold at the previous auction. It also sold N54.59 billion of the 6-month Treasury bills at 1.5 percent against 1.8 percent the paper was sold at the last auction, while it sold N49.83 billion in the 3-month paper at 1.20 percent compared with 1.30 percent the same tenor paper went for previously.
Demand from investors was heavier on the 1-year paper with a total of N215.09 billion subscriptions, followed by N158.78 billion demanded in the 6-month paper and N94.38 billion subscriptions for the 3-month debt.
The Interbank lending rate on overnight borrowing
fell by 0.10 to 2.10 percent at the close of trading on Wednesday, while Open
Buy Back traded lower at 1.40 percent and down by 0.07 percent against the
previous day figure.
Traders were of the view that the market was awash with liquidity from repayments of matured debt by the debt office and from Open Market Operation (OMO) bills.