The Central Bank of Nigeria (CBN) says it will offer about N252 billion in treasury bills next week.
The offer comprises of N6.10 billion, N69.57 billion, and N177.22 billion of the 91-day, 182-day, and 364-day bills each.
Meanwhile proceedings were broadly bearish in the treasury bills market this week, as average yield rose by 11 bps to 14.16%, amidst relatively tight liquidity earlier in the week.
Yields expanded across all ends of the curve – short, mid, and long.
Dealers say the likely expected squeeze in system liquidity, particularly in the latter part of the coming week will constrain demand and cause yields to expand.
Nigeria has unveiled plans to refinance trillions of naira-denominated treasury bills into new three-year tenured three billion dollar notes.
The plan according to the Federal Government, is part of steps to restructure the country’s domestic debt portfolio into longer term instruments and at much lower borrowing costs of around seven per cent.
Nigeria currently pays nearly 18 per cent on short-dated Naira treasuries issued each week by the Central Bank.
According to Finance Minister, Kemi Adeosun, the debt repackaging plan was approved last June by the cabinet, looking to stimulate economic growth and ease Nigeria’s cost of domestic debt servicing.
The Federal Executive Council (FEC) has approved refinancing of 3billion dollars worth of treasury bills as part of efforts to restructure the nation’s debt profile.
The Minister of Finance, Kemi Adeosun, briefed journalists after the FEC meeting that the FG is taking dollar denominated loans which are cheaper than the naira.
She added that the nation is not dollarizing the economy but trying to reduce the cost of borrowing.
“The strategy is to refinance our debt on the international market from naira into dollars. The approximately 900 million naira of borrowings would not be taken from the domestic market”.
Meanwhile, the Minister of Budget, Udo Udoma, has announced a projection of 2.3million barrels per day for 2018.
The Central Bank of Nigeria (CBN), on Friday, held two auctions to sell Treasury Bills worth N286.8 billion, as the financial regulator moves to tighten liquidity on the money market.
The debt sale reduced the level of the Naira’s liquidity in the money market and pushed up the overnight interbank lending rate to 15 percent, up from 6.7 percent where it closed on Thursday.
The sale was followed by an additional auction of N85.78 billion worth of 305-day Treasury Bills at 18.60 percent.
Traders said around N205 billion matured open market operation bills were repaid on Thursday, which initially forced down the cost of borrowing among commercial lenders, but this was reversed following the auctions on Friday.
The federal government plans to issue 124.84 billion naira worth of treasury bills on Thursday, January 5, 2017.
The bills will have maturities ranging from three months to one year.
The Central Bank of Nigeria will offer 28 billion naira in the 91 day bill, 42 billion naira in the 182 day bill and 55.84 billion naira in the 364 day bill, using the Dutch auction system.
In a notice to dealers, the CBN expects all market dealers to submit bids on Wednesday, January 4, 2017.
Nigeria will raise about 952.04 billion naira ($3.02 billion) with new issues of Treasury bills from September 15 to December 1, 2016.
This is according to the Central Bank of Nigeria (CBN) said on Wednesday in its latest issuance calendar.
The CBN said it would sell 264.47 billion naira worth of three-month bills, 204.88 billion of six-month bills and 482.69 billion of one-year bills.
Nigeria is expected to borrow around 900 billion naira from the local market to bridge its budget deficit, which is estimated at 2.2 trillion naira in this year’s budget.
The Central Bank has announced plans by the Federal Government to raise 1.07 trillion Naira worth of treasury bills for the second quarter of the year.
According to the regulator, 303.77 billion Naira will be issued in the 91-day bill, 169.98 billion Naira in the 182-day bill, while 599.63 billion Naira will be issued in the one-year bill between March 17 and June 2.
For the first quarter, a total of 1.22 trillion Naira was raised from treasury bills sale.
On Monday, the federal government issued 160 billion Naira worth of 213-day treasury bills at an open market operations auction at 7.7%.
The Federal Government of Nigeria has announced plans to raise 1.22 trillion Naira from treasury bills in the first quarter of 2016.
The Central Bank said it would auction 245.77 billion Naira worth of 91-day bills and 238.51 billion naira worth of 182-day paper between December 17, 2015 and March 3, 2016.
It will raise 735.54 billion Naira worth of 364-day treasury bills in the same first quarter of 2016.
Nigeria, Africa’s biggest economy, issues treasury bills regularly as part of monetary control measures to help lenders manage their liquidity and fund government revenue shortfalls.
Yields on local denominated debt have plummeted since the Apex Bank slashed its benchmark interest rate to 11 per cent from 13 per cent in November.
Nigeria interbank lending rates rose 3.25 percentage points week-on-week on Friday to 9.25 points on average, driven by large treasury bills sold at both primary and secondary market by the central bank, which soaked up liquidity from the system.
The Central Bank of Nigeria (CBN) sold about N250 billion ($1.26 billion) in the open market operations bills and N150.6 billion worth at an auction on Wednesday.
“The market has been very liquid from the spillover from budget allocations and large matured bonds two weeks ago, but the outflows to fresh treasury bills sales drained some liquidity and caused rates to rise on Friday,” one dealer told Reuters News Agency.
Nigerian interbank lending rates dropped below 10 percent three weeks ago, their lowest this year, because of a liquidity boost from a large cash injection into the banking system from retired bonds, treasury bills and budget allocations to government agencies.
Banks had a balance at the CBN of N494 billion on Friday compared with over N840 billion on Monday, traders said.
The secured Open Buy Back rose to 9 percent from 6 percent, 4 percentage points below the CBN’s 13 percent benchmark rate.
Overnight placement rose to 9.5 percent against 6 percent last week.
“We expect little change in lending rates next … week, unless CBN embark on aggressive mopping up of liquidity” to reduce excess cash in the system, another dealer said.
Nigeria plans to issue new Treasury bills worth N995.5 billion from March 19, the Central Bank of Nigeria (CBN) said on its debt issuance calendar on Friday.
The debt will have tenors of between 3-month and 1-year maturities, the bank said.
The bank will issue a total of N202.25 billion of the 3-month maturities during the period, and a total of N236.81 billion worth of the 6-month tenor.
A total of N556.46 billion worth of the 1-year paper will be sold during the period, the bank said.
The bank said a total of N945.5 billion worth of Treasury bills issued earlier will be due for repayment during the same period.
Investors are expected to be paid more than N87 billion when treasury bills mature this week.
According to data from the Money Market, the bills are from the Open Market Operation window of the market.
They range from 41 day to 72 day bills, with the least amount to mature put at N11.26 billion.
The Open Market Operation is one of the ways the Central Bank of Nigeria (CBN) mops up excess liquidity from the banking sector.
Meanwhile, lending rates at the interbank market fell across board owing to inflow of liquidity.
Figures from the market show that call money was traded at 10.8 per cent, while the 7 day money closed at 11.12 per cent.
These rates are regarded as one the lowest recorded in the market this year.
Nigeria’s foreign exchange reserves have hit a 2-year high of N38.38 billion.
In a statement posted on its website on Wednesday, the Central Bank of Nigeria (CBN) said reserves rose 5.3 per cent as at August the 27th.
Last month, total amount in the reserves stood at N36.43 billion higher than the N33.47 billion in the same month in 2011.
According to the Apex bank, the foreign reserves have not been as high as this since August the 10th, 2010, when they stood at N38.59 billion.
Meanwhile, the CBN plans to sell treasury bills worth N142.97 billion ranging from 3-month to 1-year maturities, at its regular twice-monthly auction on September the 6th.
The Apex bank plans to raise N32.97 billion in 91-day, notes N50 billion in 182-day bills and N60 billion in the 264-day paper.
The CBN issues treasury bills regularly to reduce money supply in the economy, tame inflation and help commercial banks manage their liquidity.