The Central Bank of Nigeria has sold a total of N137.97bn ($848.78m) in treasury bills ranging from three months to one year at its bi-monthly auction, at higher yields than at the previous auction.

The bank on Thursday sold N32.97bn worth of the three-month paper at a return of 14.10 per cent, higher than the 13.50 per cent reached at the previous auction.

It sold N45bn worth of the six-month bill at 14.94 per cent, up from the 14.14 per cent at the previous auction, while the bank issued N60bn worth of one-year paper at a return of 15.69 per cent, higher than the 13.30 per cent at an auction on May 25.

Total subscriptions stood at N223.06bn, down from N307.28bn demanded at the last auction, a reflection of waning interest by offshore investors in the local debt market, traders said.

High inflation, the declining value of the local currency and the Eurozone debt crisis are prompting offshore investors to sell down their local debt holdings and repatriate the funds.

The CBN had sold a total of N126.32bn ($791.35m) in treasury bills ranging from three months to one year at the previous auction, with higher yields on the paper than at the previous auction.

The bank sold N30.64bn worth of the 91-day paper at a return of 13.50 per cent, up from 13.19 per cent at the previous auction.

The N45bn worth of the 182-day paper was issued at 14.14 per cent, compared with 13.87 per cent at the previous auction, while the bank issued N50.68bn worth of one-year paper at a return of 13.30 per cent, lower than the 13.94 per cent at an auction on April 10.

Meanwhile, traders have said that higher yields on Nigerian Treasury bills can lure back foreign investors who have turned their backs on the market in recent weeks.

They said offshore investors were seen returning to Nigeria’s debt market in the weeks ahead as yields on shorter-dated paper were becoming attractive again.

“There is a gradual shift of attention by investors to the Treasury bills market due to rising yields in recent times and we foresee more offshore investors returning to take position in the market,” a trader said.

Source: Punch