Nigeria allot ₦509.40 billion for Treasury bills for di auction on Wednesday, 4 November. Central Bank of Nigeria conduct di sale on behalf of Federal Government. Financial Markets Dealers Association report say di amount wey dem first offer na ₦800 billion, while di bids wey come in reach ₦2.04 trillion.
Di three figures mean different things to person wey dey borrow and person wey dey save money. Di offer na di amount wey dem announce for sale. Di bids show how much investors wan buy at di rates wey dem propose. Di allotment na di amount dem actually accept. Plenty interest no mean say government borrow ₦2 trillion or sell all di ₦800 billion wey dem offer.
Na one repayment period carry most of di interest. People bid about ₦1.99 trillion for 364-day bills, while di amount on offer na ₦600 billion. From those bids dem allot ₦461.84 billion. For every one naira of di one-year bills on offer, people wan buy pass three naira worth. To send bid no guarantee say person go get allocation.
Di two shorter periods get different result. Dem offer ₦100 billion for di 91-day bills and another ₦100 billion for di 182-day bills. Bids for di first one reach ₦25.01 billion and di second reach ₦25.83 billion. Total demand for di auction no show how much investors want for each repayment date.
Di rates wey mark di cut-off for di auction na 15.40 per cent for di 91-day bill, 15.79 per cent for di 182-day bill and 15.80 per cent for di 364-day bill. Di association say all three remain di same as for di last Treasury bills auction.
Wetin e mean for you. If person quote di 91-day figure, check di time wey di rate cover and how dem work out di price. Annual rate of 15.40 per cent for di auction no promise say you go collect ₦15.40 cash after 91 days on every ₦100 wey you pay. Di auction result no set di price wey you fit buy di bill for later.