If you are an investor looking to invest in government securities, this may be the best time to invest in treasury bills.

You see, government has just announced it would pay back about 198 billion naira in maturing treasury bills this month and many foreign investors are said to be prospecting tons of cash in profit and are bidding to repatriate them.

This has now led to lack of cash in the money market and raising the value of treasury bills in the secondary market.

On Wednesday, the interest paid on one-year treasury bill rose to 10%, having dropped to 7% in the previous session after the government said it would be redeeming the maturing T-bills.

The government plans to resume auctions in January.

Treasury bills traded as high as 18% this year.

Also Read:  How To Invest In Treasury Bills 

Traders told Reuters that the sell-off in bills has caused low activity on the investor foreign exchange market as foreign players are not bringing in new funds but bidding to buy dollars, while banks are not willing to sell at lower than 360-naira per dollar.

On Wednesday, the currency market saw two transactions at 314.50 per dollar on the inter-bank window with commercial banks trading the naira weaker than the central bank rate of 306.

Traders said the drop in treasury bill yields from a high of 18% this year has triggered a switch by local funds to bonds, currently yielding about 13.5% on average, on expectations that interest rates might start to fall next year.

The one-year paper closed at about 9.5 percent on Tuesday.

Also Watch: Treasury Bills: How To Calculate Your Earnings