CBN to sell treasury bills worth N1trn between October and December

The Central Bank of Nigeria (CBN) says it plans to sell treasury bills worth N1 trillion between October and December.

This is according to a treasury bills issue programme released on Wednesday.

The CBN sells treasury bills twice in a week to investors usually issued through a competitive bidding process.

The bank also issues treasury bills to mop up excess liquidity and control money supply.

According to the document, the apex bank plans to raise N91.6 billion in the 91-day maturity period treasury bills.

For the 182-day maturity period treasury bills, the CBN says it will raise N90.2 billion and another N821.8 billion for the 364 days maturity period bills.

When investing in treasury bills, investors are paid interests upfront.

At its last treasury bills auction, the CBN offered N400 billion across the 90-day, 182-day and 364-day instruments.

It sold treasury bills worth N222.1 billion at 11.6%, 11.8% and 13.5% interest rates.

At the May monetary policy committee meeting, Godwin Emefiele, the CBN governor, had said the committee has directed that a regulatory framework that will limit the access of banks to bonds and treasury bills be put in place.

“Unfortunately, we have observed that rather than banks focus on granting credit to the private sector, they tend to direct their focus mainly on government securities,” he said at the time.

“The monetary policy committee has frowned at that and has directed the management of the central bank to put in place regulation to restrict the banks from unlimited access to government securities.

“This country badly needs growth and for us to achieve growth, those whose primary responsibility it is to provide credit must be seen to perform that responsibility.

“That they would, rather than perform that responsibility to the private sector which is the engine of growth of an economy. Instead of doing that, they would rather channel their liquidity to other sectors of the economy is what the MPC frowns at.”

In a follow-up interview, a CBN official said the framework would not bar commercial banks from investing in treasury bills but it would like to see less participation of banks in treasury bill auction.