The Central Bank of Nigeria () plans to sell $4.1 billion (N1.24 trillion) worth of treasury bills from June 15 to August 31. CBN’s debt calendar for the third quarter has shown that it aims to auction N226.64 billion in 91-day bills, N311.32 billion in 182-day and N698.64 billion in 364-day debt.
On August 3 last year, the CBN raised N245.18 billion ($773.44 million) worth of T-bills to settle short-term obligations. Treasury Bills traders said it also issued N45.18 billion in three-month debt, N80 billion of six-month paper and N120 billion of one year bills in a Dutch auction.
According to The Nation, the main investors in government securities are mainly pension funds and commercial banks, which control more than 60 per cent of the market, followed by insurance funds and a few micro-finance institutions.
With a budget plan worth N7.44 trillion for 2017, the highlights of the CBN’s sale of treasury bills include:
- Funding the government’s budget deficit and support commercial banks in managing liquidity.
- The bills’ maturities range between three months and a year and would be raised today.
- Bills are marketable short-term money market securities that serve the purpose of raising money for the government and also help in monetary policy management of the CBN.
- The treasury bills will raise cash to fund the government budget deficit, helps manage banking system liquidity and curbs rising inflation.
- Indicative rates for the auction are 16 per cent for three-months, 18 per cent for six-months and 18.5 per cent for one-year bills.
- The auction’s results will be published the day after the sale.
Yields on fixed income securities have been rising in recent months with the CBN mopping up naira liquidity to try to lure back foreign investors, who sold naira assets following the plunge in the price of oil, Nigeria’s economic mainstay.
Nigerians interested in investing in CBN’s treasury bills should go through their banks, as they act as CBN agents.
Did you find this article informative? Kindly like, comment and share!