Home Business CBN Sells N114.6bn Worth of Treasury Bills as Naira Weakens

CBN Sells N114.6bn Worth of Treasury Bills as Naira Weakens

149
0
SHARE

Central Bank of Nigeria (CBN) sold a total of N114.6 billion worth of treasury bills yesterday  in its first such auction since mid-July, as it seeks to boost dollar liquidity in the currency market after the naira fell, traders said.

The bank offered to sell 100 billion naira of bills in maturities of three, six and 12 months but got bids of 454.9 billion naira, with the one-year paper winning around 80% of the demand.

“It is a surprise auction. I don’t know why they are floating it without prior announcement,” one trader said. “This one-off might not help dollar liquidity unless they become consistent in the offering.”

Also Read:  E-payment transactions hit N56.85tr -- NIBSS reports

Pressure has been building on the naira as oil prices drop and foreign investors book profits on local bonds in response to falling yields.

The bank sold the most-liquid one-year bill at 12% on Wednesday, lower than the 12.25% it paid at its last auction in July and compared with as high as 18% it fetched a year ago.

Forex trading was thin on Wednesday. The naira was quoted at 363.50 per dollar on Monday and Tuesday compared with 362.50 at the end of last week as foreign investors repatriated funds, they said.

The bank was conducting regular weekly OMO auctions until July, when it switched focus to trying to boost economic output following recession by telling banks to lend more or face a rise in minimum reserve requirements.

Also Read:  Nigerian Senate Confirms Shonubi as CBN New Deputy Governor

Nigeria operates a multiple exchange rate regime which it has used to manage pressure on the currency. The official rate of 306.90 is supported by the central bank but the traded rate of 363.50 is the one widely quoted by foreign investors and exporters. ($1 = 306.90 naira)

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here