Nigerian Treasury Bill yields on Wednesday fell to the lowest in 17 months at an auction as bids were almost four times the amount on sale, boosted by offshore demand for the country’s debt.

The Central Bank of Nigeria said in an email statement on Thursday, that it sold N135.65bn of treasury bills the previous day, including N25.65bn naira of 91-day bills at a yield of 9.416 per cent.

Reuters reported that this represents the lowest since September 29, 2011 as bids amounted to N529.94bn.

It quoted an analyst at Ecobank Transnational Incorporated, Mr. Kunle Ezun, as saying,  “Single-digit inflation rate and offshore investors pushing for attractive yield are causing the rally in treasury securities.”

The nation’s inflation rate fell to nine per cent in January from 12 per cent in December, the lowest level since April 2008, as the effect of a year-earlier reduction in fuel subsidies dropped out of the calculation, the Abuja-based National Bureau of Statistics said February 18.

The central bank also sold N30bn of 182-day bills at 9.917 per cent and N80bn naira of 364-day securities at 10.54 per cent.

Meanwhile, the Eurobond yields fell to the lowest in more than a week as investors placed orders for more than four times the amount of Treasury bills offered at an auction.

Yield on the $500m of debt due January 2021 declined by eight basis points to 4.351 per cent as of 3:45 p.m. in London, the lowest on a closing basis since February 13, according to data compiled by Bloomberg. The naira gained less than 0.1 per cent to 157.25 a dollar.

Ezun explained that “Favourable outlook of the economy has been reflected in rising local and offshore interest in various debt securities of the country.”

The country’s foreign-currency reserves have advanced by six per cent this year to $46.9bn, the highest since at least 2010, according to February 19 data compiled by the central bank.

The yield on the country’s 16.39 per cent domestic bonds due January 2022 rose eight basis points to 10.48 per cent, according to today’s data compiled on the Financial Markets Dealers Association website.

Source: Punch