The Central Bank of Nigeria plans to issue N171.83bn ($1.09bn) in treasury bills ranging from three-month to one-year maturities at its regular bi-monthly debt auction on October 11.

The regulator said it would issue N30.16bn in 91-day paper, N73.49bn in 182-day bills and N68.18bn in the 364-day paper next week.

Traders said the one-year paper was oversubscribed by offshore investors and local pension funds, which had shown robust demand for local debt after it was included in the JP Morgan government index this week.

The CBN issues treasury bills regularly to reduce money supply, curb inflation and help banks manage their liquidity.

The naira firmed to its strongest in two weeks against the US dollar on the inter-bank market on Wednesday, supported by dollar sales by a unit of Chevron.

The currency closed at N157.20 to the dollar on the inter-bank, firmer than the N157.35 to the dollar it closed at on Tuesday.

The local unit also closed stronger at the bi-weekly foreign exchange auction, where the Central Bank of Nigeria sold $177.9m at N155.77 to the dollar, compared with $200m sold at N155.78 to the dollar at the last auction.

Dealers said a unit of Chevron oil sold $61m to some banks, boosting dollar liquidity in the market and providing support for the naira.

The inclusion of Nigeria’s debt in JP Morgan index on Monday has continued to boost participation by foreign portfolio investors’ in local debt, bringing more dollars to the economy.

Dealers said plans by the Nigerian National Petroleum Corporation to sell dollars in the market next week could further boost support for the local currency.

Inter-bank lending rates eased marginally last week to an average of 10.58 per cent, from 10.83 per cent the previous week, as market liquidity was boosted by repayment of large funds in matured treasury bills.

Source: Punch