Nigeria T-Bills Yields Fall to 3-Month Lows, Bids Triple

Nigerian Treasury bill yields declined to the lowest in more than three months at an auction yesterday as investors bid for three times the 142.9 billion naira ($905 million) on offer.

The Central Bank of Nigeria sold 32.97 billion naira of 91-day bills at a yield of 13.64 percent, the Abuja-based central bank said today in an e-mailed statement, the lowest since the May 25 sale. The bank sold 20 billion naira of 182-day debt at 13.80 percent and 90 billion naira of 364-day securities at 13.87 percent, the lowest since May 10. Bids totalled 430.8 billion naira, the highest since July 25.

“There was meaningful international demand at the auction,” Samir Gadio, an emerging-markets strategist at Standard Bank Group Ltd. in London, said today in an e-mailed response to questions. The results, which were higher than the market expected, “also mean the CBN is keen to keep short-term rates high and liquidity conditions under relative control as a further qualitative drop in T-bill yields would eventually jeopardise exchange rate stability,” he said.

The naira, which strengthened 0.4 percent at 158 a dollar in Lagos, has risen 2.8 percent this year, making it the best performing currency in Africa after the Zambian kwacha.

The central bank held its benchmark interest rate at a record 12 percent on July 24 to contain inflation and support the naira. The inflation rate declined to 12.8 percent in July from 12.9 percent a month earlier, the Abuja-based National Bureau of Statistics said Aug. 17.

Nigeria also sold 14.9 billion naira of 91-day securities at a yield of 13.6 percent, 13.5 billion naira of 182-day debt at 13.8 percent and 64.2 million naira of 182-day bills at 13.8 percent yield to non-competitive bidders, according to the central bank.

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