Nigerian T-Bills Yields Jump as Bank Sells $1.1 Billion Debt

Nigeria sold 172.06 billion naira ($1.1 billion) of Treasury bills at an auction yesterday, with yields rising from a previous sale amid high subscription.

The Central Bank of Nigeria sold 32.06 billion naira of 91- day bills at a yield of 15.04 percent, 110 basis points more than at an auction July 25. It also sold 50 billion naira of 182-day securities at 16.56 percent, 162 basis points higher than the previous sale, and 90 billion naira of 364-day bills at 18.17 percent, a jump of 320 basis points. Bids totalled 172.06 billion naira, the Abuja-based bank said today in an e-mailed statement.

“There was strong offshore participation at the 364-day tenor which also resulted in an appreciation of the currency,” Samir Gadio, an emerging-market strategist at Standard Bank Group Ltd., said in e-mailed comments. “Rates in the primary market inched up in reaction to tighter liquidity conditions” imposed by the central bank.

Nigeria’s inflation rate rose to 12.9 percent in June from 12.7 percent in April, the National Bureau of Statistics said July 18, prompting the central bank to raise cash reserve limits for lenders as it tries to bolster the naira and control inflation.

The regulator restricted access to its twice-weekly currency auctions last week, barring lenders who used repurchase transactions and its standing lending facility.

The naira rose for a second day to 158.35 a dollar by 11.09 a.m. in the commercial capital of Lagos, heading for the highest in almost three months, supported by the Treasury bills and the central bank’s sale of $318.8 million, the most in a month, at a foreign-currency auction yesterday.

To contact the reporters on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net;

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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