The Central Bank of Nigeria (CBN) will in the third quarter (Q3) 2019 issue a total of N809.4 billion worth of Treasury Bills for various tenors while the same amount will mature in the same period.
A breakdown of the Nigerian Treasury Bills issue programme for the Q3 2019 released on Friday by the CBN shows that a total of N90.6 billion for 91-day tenor, N188.03 billion for 182-day, and N530.7 billion will hit the financial market in the third quarter.
Similarly, the Nigerian Treasury Bills worth of N80.6 billion, N154.03 billion and N574.7 billion will mature in the same period.
The CBN sells treasury bills twice a month to help the Federal Government raise money to fund its budget deficit.
Nigeria’s money market will be awash with liquidity this month of June as a total inflow of about N1.36 trillion is expected to hit the market.
The expected inflows will come from the various maturing government securities and Federal Accounts Allocation Committee (FAAC) in June 2019.
However, a total outflow of approximately N753 billion is estimated from the various sources, leading to a net inflow of about N607 billion.
“The market is expected to be liquid in the month of June 2019; this may necessitate the issuance of Open Market Operation (OMO) to mop-up the liquidity in the system,” said Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited.
In 2018, the total value of NTBs issued and allotted was ₦3.34 trillion apiece, indicating a decline of ₦1.15 trillion or 25.65 per cent below the level in 2017.
The decrease was attributable largely to lower NTBs issued coupled with the redemption of treasury bills worth ₦78.05 billion in December 2018 as the Government indicated its preference for cheaper and longer tenored foreign debt.
Total public subscription stood at ₦6.71 trillion, compared to ₦7.17 trillion in 2017. The lower level of public subscription was traceable to the high patronage at OMO auctions.
The structure of allotment of the instrument indicated that banks (including foreign investors) took up ₦1.76 trillion or 52.76 per cent, mandate and internal funds ₦1.51 trillion or 45.12 per cent and merchant banks ₦70.73 billion or 2.12 percent. There was no CBN take-up in the period under review.
The stop rates, in 2018, ranged from 10.00 to 12.55 per cent for the 91-day; 10.30 to 13.93 per cent for the 182-day and 10.70 to 14.45 per cent for the 364-day tenors. The range of stop rates in 2017 were between 12.95 and 14.00 per cent for the 91-day, 15.00 and 17.50 per cent for the 182-day and 15.57 and 18.98 per cent for the 364-day tenors.
