Nigeria’s 364-Day T-Bill Yield Falls as Bids Hit Record

Nigeria’s one-year Treasury bill yield fell to the lowest in 16 months as offshore demand took subscriptions to the highest on record.

The Central Bank of Nigeria sold 117 billion naira ($744.5 million) of 364-day bills yesterday at a yield of 10.6 percent, it said today in an e-mailed statement, the lowest since Sept. 29, 2011. The regulator also sold 42 billion naira of 91-day bills at a yield of 10.32 percent and 60 billion naira of 182-day securities at 10.5 percent. Bids for one-year debt amounted to 342 billion naira, the highest on record, out of a total of 546.4 billion naira, it said.

“Offshore participation in the local debt market is up, boosted by yields and a positive outlook for the economy,” Kunle Ezun, a Lagos-based analyst at Ecobank Transnational Inc., said in a telephone interview today. “Foreign investors buy one-year bills on the relative low-risk factor, much as they buy bonds benefiting from inclusion in global indexes.”

Barclays will add Nigeria to its local-currency government bond index in March, it said Nov. 6. JPMorgan Chase & Co. added the West African nation’s bonds to its benchmark emerging-market index series in October. The yield on 16.39 percent naira debt due January 2022 fell eight basis points to 10.93 percent, according to yesterday’s prices on the Financial Markets Dealers Association website.

The central bank kept its benchmark interest rate unchanged for the eighth time on Jan. 21 to stabilize the naira. The inflation rate in December eased to 12 percent, from 12.3 percent in the previous month, as the effects of flooding that damaged agricultural output last year began to subside.

Nigeria’s naira appreciated 0.1 percent to 157.17 per dollar as of 10.22 a.m. in Lagos, the commercial capital. It has gained 2 percent this year, the third-best in Africa, according to data compiled by Bloomberg.

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