N823.4bn Treasury bills For Sale in Q1 2019- CBN
The Central Bank of Nigeria (CBN) says it plans to raise treasury bills worth N823.43 billion in the first quarter of 2019.
The CBN made the disclosure in its 2019 Nigerian Treasury Bills Issue programme for the first quarter of the year which was posted on its website.
The apex bank said the bills which would be rollover, would range between three months and one year papers.
They include the 91-day bills worth N51.46 billion, 182-day bills of N164.92 billion and 364-days bill worth N607.05 billion.
The apex bank also said that N985.93 billion worth of treasury bills would mature the same period.
They are in 91-day, 182-day and 364-day paper worth N59.02 billion, N248.84 billion and N678.06 billion respectively.
The CBN sells treasury bills twice a month to help government fund its budget’s deficit.
The country issues treasury bills regularly as part of monetary control measures to help banks manage their liquidity and control the money supply.
Economic Confidential recalls that in September 2018 and in apparent move to attract investors in the fixed income market, the CBN over-allotted the 364-day bill with yield at 15.60 per cent, up from 15 per cent previously.
Also, the spot rate of the 364-day instrument climbed to 13.5 per cent, up from 13.05 per cent.
While the 182-day and 364-day instruments were oversubscribed, the 91-day bill was undersubscribed by over 50 per cent as well as the182-day at marginal rates of 12.3 per cent.
But the 91-day bill was under-allotted at 11 per cent. “As investors continue to favour long tenored treasury bills over shorter tenors, we expect higher rates to be sustained into this week’s trading especially as a total of N182.2billion treasury bills maturity is expected to hit the system with the same amount planned to be rolled over in 91-day (N5.4 billion), 182-day (N8.4billion) and 364-day (N168.4billion) maturities,” analysts at Afrinvest Securities Limited stated in a report.
On his part, an analyst at Ecobank Nigeria, Kunle Ezun, disclosed that development in the money market last week was a reflection that there was likely going to be gradual movement in rates, “because we saw yield on one-year bills going up to 13.5 per cent.”
He added: “And from the open market operations (OMO) the central bank did, the market was looking up to 14.5 per cent.
“So, increasing the one-year treasury bills is a signal that rates might go up to keep the foreign investors in market.
“The central bank is trying to provide them the comfort to keep their funds in the country,” he explained.
Also, the Head, Research and Strategy at FSDHMerchant Bank Limited, Ayodele Akinwunmi, anticipated spike in treasury bills yields.
“The major driver will be to enable the central bank attract foreign inflows so as to achieve growth in external reserves. Investors should take advantage of the current yield on one-year treasury bills,” Akinwunmi said.