THERE are expectations that stop rates of issuances will decline amid demand pressure as Treasury-bills worth N187.11 billion will mature via the primary market, which will equate to T-bills worth N187.11 billion to be auctioned by the Central Bank of Nigeria (CBN).
The auctions would be via the primary market, viz: 91-day bills worth N1.75 billion, 182-day bills worth N17.16 billion and 364-day bills worth N168.21 billion, according to dealers.
Meanwhile, Nigeria’s naira bonds and treasury bills priced in the local currency are turning out to be something investors from abroad want to stay away from as the country’s high inflation makes the yields on the assets unattractive for them.
At 22.4 percent, price levels in Nigeria increased to the highest levels in nearly two decades last month, outrunning the rates at which such securities are priced, so much that returns on them will have been much eroded by the time they fall due.
That has made their real yields negative and foreign investors want notes to be priced higher to make up for inflation’s adverse impact.
Bloomberg cited a London-based institutional investor on Thursday as saying only rates in the 15-20 percent band could tempt it to plough money into naira-denominated securities.
An analyst at another told the news outlet that treasury bills’ yields need to really reflect the monetary policy rate to encourage foreigners to invest in the local debt market.
The circumstances are being complicated by Nigeria’s ongoing currency overhaul, which has collapsed its numerous exchange rates into a single reference rate and helped bridge the gulf between the parallel and official rates.
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