Nearly N5 trillion chased N600 billion of Central Bank of Nigeria bills in a single auction, highlighting investors’ appetite for short-term naira assets at yields of around 20 percent.
But beneath the strong demand lies a more important question for investors: Is the current yield an opportunity to lock in attractive returns, or a rate that could disappear when the monetary cycle turns?
At its first Open Market Operations auction under the new framework allowing individuals, corporate, and non-bank financial institutions to participate through banks, investors submitted N4.93 trillion for N600 billion on offer.
The 103-day bill cleared at 20.39 percent, while the 138-day instrument cleared at 20.01 percent. The CBN allotted about N2.60 trillion across the two maturities.
The auction shows just how attractive short-term naira instruments have become, but for investors, the critical issue is not simply how much they can earn today. It is what rate they will get when their money comes back.
