Nigeria’s CBN Raises Interest Rates on Short-Term Debts to Attract Investors


Nigeria’s central bank increased interest rates on short-term debt obligations in a move aimed at reducing naira liquidity and drawing foreign investor inflows.

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Interest Rate Hike:
The Central Bank of Nigeria, headquartered in Abuja, sold one trillion naira ($696 million) in treasury bills to both local and foreign investors, offering rates nearly double those of previous offers. Yields for the one-year bill surged to 19%, marking the highest level in 12 years compared to 11.5% at the previous auction on Jan. 24.

Impact on Debt Instruments:
The three-month bill sold at 17.24%, triple the rate offered in January, while six-month notes fetched 18%. The 19% rate on the 364-day bills now exceeds the central bank’s policy rate of 18.75%, narrowing the gap with the inflation rate, which reached a nearly three-decade high of 28.9% in December.

Normalization Efforts:
The auction signals the central bank’s efforts to normalize interest rates in Nigeria and attract foreign investors to stabilize the naira amidst economic challenges.

Reform Initiatives:
Nigeria has recently eased currency controls and implemented reforms to revamp its foreign exchange market, addressing a dollar scarcity estimated at $2.2 billion by the central bank.

The central bank’s proactive measures aim to bolster investor confidence and strengthen Nigeria’s economic resilience in the face of ongoing financial pressures.

Godwin Okafor
Godwin Okafor
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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