The Central Bank of Nigeria (CBN) has announced its intention to issue N1.64 trillion in Nigeria Treasury Bills during the second quarter of 2024, covering the period from March to May.
This new offer is part of a refinancing plan for existing maturing treasury bills of various tenures.
Under the bill issue program, the CBN aims to refinance its 91-day, 182-day, and 364-day treasury bills that are set to mature during the specified period.
Here are the details of the program:
– For the 91-day treasury bills, the CBN plans to raise N414.28 billion.
– For the 182-day T-bills, it aims to sell N43.74 billion.
– For the 364-day T-bills, the CBN plans to sell N1.183 trillion worth of treasury bills.
In March, the CBN intends to sell N822.63 billion worth of treasury bills, followed by N292.20 billion in April, and N388.33 billion in May.
Last week, the CBN conducted a successful auction where it sold N1.58 trillion worth of T-bills to investors at a 19% interest rate. The oversubscription of all tenors in the auction underscores the strong demand for these securities among investors.
Treasury bills are short-term financial instruments issued by the Nigerian government through the CBN to raise funds for covering budget shortfalls. They are considered a low-risk investment option within Nigeria and play a crucial role in managing excess liquidity and addressing inflation.
Given Nigeria’s current inflation rate of 29.90%, which is at a 27-year high, the CBN has raised the Monetary Policy Rate (MPR) to 22.75% in an effort to combat inflation. Adjusting interest rates on Treasury bills, especially those with a one-year term, is one strategy employed by the central bank to curb inflationary pressures.
The upcoming issuance of treasury bills by the CBN reflects its ongoing efforts to manage liquidity in the financial system and support the government’s fiscal operations while addressing inflation concerns.
