CBN tightens liquidity through sales of N98bn worth Treasury Bills

The Federal Government of Nigeria through the Central Bank of Nigeria (CBN) has tightened liquidity to support the nation’s currency, Naira, through the sales of fresh N98 billion worth in Treasury Bills (TB) securities on Thursday, after it auctioned N133.25 billion on Wednesday.

On the other hand, the Naira, as at close of trading activities stabilised at both official and unofficial foreign exchange markets.

The apex bank, on Thursday sold the 91-day bill at a higher interest rate of 16 percent plus a 196-day bill at 17.81 percent.

Traders, however, explained that money market has been short of liquidity for more than a week due to mopping up of the local currency following the recent maturity of some N86 billion of treasury securities.

The central bank on Wednesday auctioned N133.78 billion worth of treasury bills, as the apex bank offering N32.4 billion in three-month paper, N35 billion in six-month bill and N66.38 billion in one-year note.

The bank issues treasury bills twice a month to help the government to finance its budget deficit, curb money supply growth and provide an avenue for lenders to manage liquidity.

However, at the official segment of the forex market, the Naira, as at close of yesterday trading activities maintained 305.60 to the US Dollar sold on Wednesday. But slightly lower than 305.55 exchanged on Tuesday and Monday, however, weaker than 305.50 sold last Friday.

Also, at the parallel market, nothing changes as the local currency seen at 363 to the Dollar, the same rate it has been trading since Monday but slightly gained against the Pound Sterling to close at 474 compared to 475 traded on Wednesday, Tuesday and Monday. Even though, it was flat against the Euro at 425 the same rate it has been selling since Monday.

Although, the Nigeria Autonomous Foreign Exchange (NAFEX) window, recorded changes with the closing rate dropped to 359.75 against an appreciated figure of 358.89 to the dollar recorded on Tuesday, before closing at unchanged rate of 360.27 the same price traded on Wednesday, which was stronger than 360.42 exchanged on Tuesday and 360.75 declared on first trading day of the week (Monday).

Even as autonomous FX window, declared depreciated traded volume of #326.03 million against daily turnover of $328.01 million recorded a day earlier and $268.18 million sold on Tuesday, although, better than $167.71 million transacted on Monday.