The Central Bank of Nigeria will issue a total of N841.32bn worth of treasury bills in 91-day bills, 182-day bills and one year bills in the third quarter.

According to latest figures from the CBN websites, the bank will issue 91-day bills worth N220.05bn, while a total of N381.27bn will be issued in the 182-day bills.

The publication also showed that the regulator would issue N240bn in one-year bills in the third quarter. The total figure will be issued in seven different debt auctions.

The CBN issues treasury bills regularly as part of monetary control measures to help lenders manage their liquidity.

The CBN sold N735.63bn worth of treasury bills in the second quarter.

A statement by the CBN had showed that it sold N160.72bn of the 91-day treasury bill, while it sold N263.49bn of the 182-day bills, and N311.41bn of the one year bills.

Currency dealers had attributed the falling yields on the longer dated treasury bills to the surge in demand from offshore investors.

Meanwhile, analysts at Financial Derivative Company Limited said they expected foreign exchange inflows to fall from $4.31bn in January to $3.34bn in July.

FDC in its monthly publication said, “If oil prices were to drop to $80per barrel (which is 50 per cent likelihood based on current trends), there is a 95 per cent likelihood that forex inflows will decline to approximately $3.03bn. In this situation Nigeria’s external reserves would be expected to follow suit and drop to a value as low as $22bn, covering less than three months of imports. Resultantly, the CBN may be forced to allow the naira to depreciate sharply to N165/$1, to compensate for the substantial loss in oil revenue.”

It said nominal interest rates had been on a downward trend with the monetary policy rate unchanged at 12 per cent.

“In the month of May, Nigeria Interbank Offered Rates declined sharply by 178 basis points, to close at an average of 12.84 per cent; this is 70bps lower than the corresponding period in April. The decline recorded in May was largely due to a net inflow of N229.57bn into the money market system, which the bulk came from the monthly federal allocation to the three tiers of government,” it added.

Source: Punch/Ademola Alawiye