CBN To Raise N310bn In TBills As Naira Continues Gaining
The Central Bank of Nigeria said it will auction $100 million in forward contracts and also raise N310.14 billion through Treasury Bills auction tomorrow, Wednesday, March 1, 2016 even as the naira continued to gain strength.
The apex bank last week sold forex at the interbank market driving a gain in the local currency which rose by 12 per cent. The value of the naira rose last week from N522 to the dollar to N460.
The value of the naira further rose yesterday, the first trading day of the week to N455 at the parallel market as traders say they expect the trend to continue as the apex bank continue to meet demand at the interbank market.
Meanwhile, the CBN plans to mop up N310.14 billion from the system through the sale of 91, 182 and 364 days Treasury Bills. The apex bank says it will raise N26.14 billion through 91 day bill while it will raise N62 billion and N222 billion through 182 and 364 spray bills.
The TBills sale will be a roll over as there will be a Treasury Bills maturity of N310.2 billion and analysts say they expect the auction to be oversubscribed given the attractive yields each of the instruments offer.
Performance in the Treasury Bills market last week was largely bearish due to tighter system liquidity during the week. Average yield trended higher on most trading sessions, up 36 basis points on Monday but eased by mid-week as system liquidity improved. Nonetheless, average rate rose 55bps W-o-W closing at 16.9 per cent on Friday.
