The Central Bank of Nigeria (CBN) sold N258.4 billion ($163 million) of one-year Treasury bills at a yield of 22.1%, as investor bids amounted to 1.37 times the amount of the securities on offer.
Nigerian Treasury bills were auctioned at a record high yield on Wednesday, a day after the central bank raised interest rates again in a bid to tackle inflation and support the nation’s currency.
The central bank on Tuesday raised its benchmark interest rate by 50 basis points to 26.75% and pledged to rein in price pressures that are at a 28-year high.
It also widened its “asymmetric corridor,” lifting the cost at which lenders can borrow to 500 basis points above the policy rate and adjusting the return on their deposits to 100 basis points below the benchmark. It was previously plus 100 basis points and minus 300 basis points.
The adjustment of the asymmetric corridor “is an effectively tighter stance, aimed at further constraining liquidity in the financial system,” according to analysts at BancTrust & Co. They said it “suggests that rates on OMO and T-Bills could trend higher over the coming weeks,” referring to open market operations.
The central bank also sold N6.4 billion of 182-day bills at 19.5% and N13.1 billion of 91-day bills at a rate of 18.5%, up from 17.44% and 16.3% respectively.
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