CBN plans N310bn Treasury bills auction next week

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Oyetunji Abioye with agency report

The Central Bank of Nigeria is planning to sell N310.22bn ($984.83m) of short-dated Treasury bills at an auction on March 1.

The CBN said on Tuesday it was planning to raise N26.14bn in three-month debt, N62bn in six-month bills and N222.08bn in one-year notes, using a Dutch auction system.

Payment will be due the day after the auction.

The CBN issues Treasury bills twice a month to finance the budget deficit, help manage commercial lenders’ liquidity and curb rising inflation.

The country’s inflation had climbed to 18.72 per cent in January, its 12th straight monthly rise. The trend was worsened by dollar shortages, which had crippled the country’s import-dependent economy and triggered the first recession in 25 years.

The Federal Government is also facing funding challenges due to the low price of oil. It expects the budget deficit to widen to N2.36tn this year as it tries to spend its way of out of the recession.

More than half of the deficit will be funded through local borrowing, the government has said.

The Federal Government is planning to raise $300m via Diaspora Bond in March, the Minister of Finance, Mrs. Kemi Adeosun, has said.

She said, “On the Diaspora Bond, we are keen for that to take off. We are doing the Eurobond at the moment. The Eurobond is for January and as soon as that is completed, the next one is the Diaspora Bond.

 “We are very excited that the National Assembly has approved the Diaspora Bond. We believe Nigerians abroad want to support development in Nigeria. We are hoping that the Diaspora Bond will be rolled out by March.”

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