The Central Bank of Nigeria has said it plans to auction N142.1bn ($884m) in treasury bills with maturities ranging from three months to one year at a twice monthly debt auction next Wednesday.
The CBN said in a statement that it would issue N32.05bn in 91-day paper, N50bn in 182-day bill and N60bn in 364-day bill on August 8, in a Dutch, or reverse, auction.
Treasury Bills yields rose marginally at last month’s auction to 13.94 per cent for the three month paper from 13.75 per cent, after CBN tightened liquidity to boost the naira, which has lost three per cent since April.
The CBN had earlier said it would 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 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 would be issued in seven different debt auctions.
The CBN issues treasury bills regularly as part of monetary control measures to help banks manage their liquidity.Investment in treasury bills fell by 16.7 per cent to N683.67bn in June as against the N820.74bn that was recorded in May.
Although the Financial Market Dealers Association in its monthly financial and economic report for June did not give any reason for the development, analysts attributed it to the slight drop in inflation rate for May.
They added that low inflation rate was always associated with low interest on treasury bills.
The report showed that at the first, second and third auction in the month under review, 91 days stop rates attained an average value of 14.08 per cent against the 13.35 per cent it attained last month; the 182 days 15.19 per cent relative to the 14.01 per cent it was in May, while the 364 days bills also got to an average of 15.65 per cent when juxtaposed with 14.12 per cent it was the preceding month.
Source: Punch/Ademola Alawiye
