Goverment to raise additional N43b debt from T-Bills

CBN to offer another $150m in forwards market

The Federal Government’s debt strategy is now in full swing, as additional debt of N43.2 billion would be raised through the Treasury Bills (T-Bills) programme in the second (Q2) of 2017.

T-Bills issuance, basically conducted by the Central Bank of Nigeria is used to mop up excess money in circulation, as well as raise new debts and immediate cash for government to implement its planned budget.

The move would sustain the already low money supply mode in the economy, aid the fight against inflation, which currently has dropped for the first time in more than 12 months and provide immediate cash for the government to implement its planned budget.

The offering, which would be conducted on Thursday, has already impacted on interbank lending rates, as financial institutions and investors are now chasing after available naira to pay for the offer.

Meanwhile, the CBN said it would sell $150 million in foreign exchange (forex) forwards market to sustain the ongoing markets intervention in the last three week that has so far hit $1.37 billion.

The renewed forex intervention has helped keep rate steady at the interbank market, closing Monday deals at N305.5/$, while reducing losses at the parallel market to N454/$.

CBN Governor, Godwin Emefiele, said the bank is aware of the short-term pains people are all going through right now, noting that it is also an opportunity for all to look inwards, diversify the economy, produce locally, and create jobs for the unemployed youths.

“Let me assure everyone that the CBN is acting in the best interests of ordinary Nigerians, regardless of the noise from the few entrenched interests whom our policies may be hurting.

“Let me also reiterate the central bank’s willingness, determination, and capacity to continue to meet all legitimate transaction-based forex demands in the market,” he said.

However, the apex bank would be raising N126.3 billion in 364-day treasury bill maturity, against a rollover of N83.1 billion, resulting to about N43.2 billion new debt.

The bank’s treasury bills issuance programme for Q2 showed that N242.7 billion and N197.9 billion in 91-day and 182-day maturities would be rolled over, while 364-day bill worth N646 billion would become N689.3 billion due to additional debt.

In the first quarter, specifically February, a N30 billion T-Bill offering, was increased to N178.4 billion at 18.6 per cent, raising new deal worth N148.4 billion.

The treasury operations’ plan showed that it would redeem a total of N1.23 trillion in 91, 182 and 364 days securities and simultaneously roll the same back, with only an addition of N15.8 billion in first quarter of 2017, but now a 321-day bill has overshot the February debt schedule.