Nigeria’s central bank plans to issue a total of N722.17 billion treasury bills in the third quarter of 2021, as the same amount will be maturing between June 2021 and August this year.
The Central Bank of Nigeria (CBN) stated this in the Nigerian Treasury Bills issuance programme calendar released on its website on Friday.
On a quarter-on-quarter basis, the amount is 26.61 percent higher than N570.39 billion offered in the second quarter (Q2) 2021, and 12.12 percent below the N821.8 billion issued in the corresponding quarter of 2020.
The breakdown of the T-bills programme to be issued in the next three months, which also represents the amount that would mature during the same period, consists of a total of N41.36 billion for 91-day tenor, N151.13 billion for 182-day tenor and N529.68 billion for 364-day tenor.
The CBN issues Treasury Bills twice in a month to help the Federal Government fund its budget deficit, support banks in managing liquidity in the system and curb inflation.
Nigeria’s inflation rate decelerated further for the second consecutive month to 17.93 percent in May 2021 from 18.12 percent in April 2021, according to the National Bureau of Statistics (NBS).
The International Monetary Fund (IMF) has advised the CBN on monetary policy, saying it should strengthen the monetary targeting regime.
The Washington-based Fund recommended integrating the interbank and debt markets and using central bank or government bills of short maturity as the main liquidity management tool, instead of the cash reserve requirements.
In its first quarter of 2021 economic report, the apex bank noted that the financial markets were relatively stable in the period despite the resurgence of the COVID-19 pandemic around the world. The domestic money market remained very liquid, leading to low short-term interest rates.
At the fixed income securities segment yield on FGN increased, reflecting rising inflationary pressures, while the Nigerian Treasury Bills (NTB) yield declined. Similarly, yields on the CBN securities slightly moderated from the preceding month’s level.
Giving his views on how to stimulate activities in the financial market, Nnamdi Nwizu, co-managing partner/head, trading, Comercio Partners Limited, an investment and financial advisory company, said, “If we want rates to come back again in fixed income space to lower levels, which will make it more affordable for corporates investors to come back and start issuing securities again like what we saw towards the ends of last year when yields were low, we need to try and get foreign investors to come back.
“I think we need to keep growing our external reserves again because what has happened now is that we have very little participation from foreign investors and as long as that continues to happen, we would continue to see reduced participation in the fixed income and equities’ space.”