Wednesday, 3 August 2016

CBN Targets N245 Billion in Treasury Bills As Naira Firms At N310/$

As the Central Bank of Nigeria (CBN) announced plans to mop up N245.18 billion through Treasury Bills from the financial system, the value of the naira closed yesterday firmer at N310.50 to the dollar.

Citing a CBN Treasury Bill calendar, traders said the apex bank would today raise N245.18 billion worth of treasury bills with maturities ranging between three months and a year.

The apex bank plans to issue N45.18 billion in 3-month debt, N80billion of 6-month paper and N120billion of 1-year bills in a Dutch auction, they said. Indicative rates for the auction are 16 per cent for 3-month, 18 per cent for 6-months and 18.5 per cent for 1-year bills, one trader said. The auction's results would be published the day after the sale.

Yields on fixed income securities have been rising in recent months with the central bank mopping up naira liquidity to try to lure back foreign investors who sold naira assets following the plunge in the price of oil, Nigeria's economic mainstay.

The bank lifted interest rates by 200 basis points last week to 14 per cent to help fight inflation, which hit a 10-year high of 16.5 per cent in June. Meanwhile the naira closed at N310.50 against the dollar on yesterday, firmer than previous close of N315.50, Thomson Reuters data showed.