In furtherance of its sustained monetary policy measures aimed at raising funds through debt instruments to bridge the huge gap in government’s yearly budgets, the Central Bank of Nigeria (CBN) is set to offer N400 billion worth of maturing Nigerian Treasury Bills (NTBs) for subscription by investors.
Latest information from the apex bank indicated that the auction would be conducted through a Primary Market Auction (PMA), with settlement expected the following day.
The NTBs reissuance is part of the CBN’s efforts to refinance approximately N927 billion in maturing government securities, and the offering will comprise N50 billion in 91-days bills, N100 billion in 182-days bills and N650 billion in 364-day bills.
Apart from helping the government to fund its programmes and projects through the treasury bills, the move is part of the CBN’s ongoing strategy to mop up excess money supply from the economy in view of the rising inflation rate, which increased by 105 basis points (bps) to 24.23% in March this year.
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Commenting on the planned NTBs reissuance, analysts at Cordros Research projected: “Given our expectations for improved system liquidity next week, we anticipate an improvement in the demand for bills, causing yields to taper slightly.
“Additionally, the CBN is scheduled to conduct an NTB PMA on Wednesday with N400 billion worth of maturing bills on offer. At the auction, we expect rates to taper, albeit slightly”, the experts added.
