CBN Borrows N141bn via TBs at Lower Yields

The Central Bank of Nigeria borrowed N140.88bn ($448m) via short-dated Treasury bills at an auction on Wednesday, attracting lower yields across the board, except on the three-month debt that was flat, data from the CBN showed on Thursday.

The CBN sold N28.12bn of the three-month paper at 14 per cent, the same as at the last auction on September 14.

It sold N23.68bn of six-month debt at 17.27 per cent against 17.77 per cent previously.

Traders said yields on the local debt were expected to gradually trade lower after the CBN’s Monetary Policy Committee retained its benchmark interest rate at 14 per cent at its last meeting on Tuesday.

The central bank had borrowed N183.24bn via Treasury bills at an auction last Wednesday, with mixed yields on all the tenors.

Data from the Debt Management Office showed that it raised N48.10bn of three-month paper at 14 per cent, down from 14.38 per cent it sold at an auction on August 31.

It also sold N48.45bn worth of the six-month paper at 17.77 per cent, higher than 17.50 per cent previously.

A total of N86.69bn was sold in the one-year debt at 18.48 per cent against 18.42 per cent at the last auction.

The Federal Government has estimated that it will borrow around N900bn from the local debt market this year to fund a budget deficit projected at N2.2tn.

The CBN has said it is planning to borrow N1.77bn via Treasury bills in the last three months of the year.

In its fourth quarter Treasury bill issue programme, the apex bank said it would raise about N815.37bn, comprising 91 days, 182 days and 364 days’ debt instruments

In addition to the above, the central bank is also planning to raise about N952.05bn as rollover in the three categories of the instruments.

The Federal Government distributes revenues from crude exports and taxes among the three tiers of government every month.