CBN To Resell Maturing N193bn Treasury Bills
The Central Bank of Nigeria (CBN) will today, Wednesday, November 9, 2022, roll over the N109.03 billion treasury bills maturing at the primary market auction (PMA).
The debt instruments are in three tenors of 91 days, 182 days, and 364 days. The bank will sell N1.15 billion of the three-month bill, N2.83 billion of the six-month bill, and N189.06 billion of the 12-month bill to investors.
Going by the three previous PMAs, traders would be expecting the central bank to jerk the stop rates higher today to sustain appetite for the investment tool.
As a result of rising inflation, the CBN consecutively increased the monetary policy rate (MPR) in its last two monetary policy committee (MPC) meetings. It first increased the anchor rate to 14.00 per cent from 13.00 per cent and then raised it to 15.50 per cent, noting that it could still increase the rate if inflation fails to ease.
The National Bureau of Statistics (NBS) said last month that the inflation rate in September 2022 increased by 20.77 per cent from 20.52 per cent in August 2022.
Analysts are already projecting that in October, inflation should cross the 21 per cent ceiling due to hikes in prices of food and transportation caused by flooding in almost all the states of the federation.
Economic Confidential reports that at the PMA held two weeks ago, the apex bank cleared the 91-day instrument at 6.50 per cent, the 182-day instrument at 8.05 per cent, and the 364-day instrument at 14.50 per cent amid a decline in the demand for the debt instruments.
However, the central bank would not want a repeat of the last exercise, and one of the ways to prevent this is by increasing the stop rates to attract more subscriptions.