Central Bank of Nigeria (CBN) on Thursday moped-up a total of N230 billion in treasury bills from the banking system via Open Market Operations (OMO).
The breakdown of the OMO auction revealed that N190 billion was offered for 245 days tenor at a stop rate of 12 percent. The offer, which matures on December 27, 2018, was oversubscribed by N602 billion with a total sale of N115.6 billion.
For 91 days tenor, N40 billion was offered and was oversubscribed by N111.02 billion with a total sale of the same amount. It was offered at a stop rate of 10.9 percent and would mature on July 26, 2018.
The Federal Government said it made N345.75 million from sales of savings bond in March and April. The results of the sales published on website of the Debt Management Office (DMO) on Thursday in Abuja, showed that N151.82 million was allotted in March and N193.93 million in the April sales.
N30.52 million was allotted at 10.74 percent in 110 successful subscriptions to mature in March 2020, while N121.30 million to mature in March 2021 was allotted at 11.74 percent in 164 successful bids.
Also, N64.92 million was allotted at 10.75 percent with 144 successful subscriptions to mature in April 2021, while N129.01 million was allotted at 11.75 percent in 177 successful bids to mature in April 2021.
Savings bond issuance is expected to help finance the nation’s budget deficit, according to News Agency of Nigeria.
The bond issuance is part of the Federal Government’s programme targeted at the lower income earners to encourage savings and also earn more income (interest), compared to their savings accounts with banks.
The bonds are debt securities (liabilities) of the Federal Government, backed by its ‘full faith and credit.’ Interests are to be paid at regular periods and principal repaid at maturity.
The bonds have tenure of between two to three years and a minimum size of investment of N5, 000 and maximum of N50 million.
The bond is aimed at deepening national savings culture, diversifying funding sources for the government and providing opportunity to all citizens, irrespective of income level to contribute to national development.
