CEM REPORT, FINANCE | Nigeria’s central bank is set to raise N1.13 trillion in treasury bills for the second quarter of 2023. This compares to N926 billion raised in the second quarter of 2022.
The bills are divided into 91-days, 182-days, and 364-days raising N23.6 billion, N34.7 billion and N1.78 trillion respectively. The bills are also a roll-over of maturing bills for the corresponding period.
The government has raised a total of N540.9 billion via treasury bills for January and February combined. This compares to N342.6 billion raised in the corresponding period of 2022.
Nigeria’s treasury bills rates have risen over the last few weeks with the 91 day treasury bills going for 3%, 182 days at 3.24% and 9.9% for the one year bill.
CBN and Treasury Bills
Treasury bills (T-bills) are short-term debt instruments issued by the Nigerian government through the Central Bank of Nigeria (CBN) to raise funds to finance government budget deficits. T-bills are one of the investment options available to investors in Nigeria and are considered to be low-risk investment instruments.
The central bank has relied on treasury bills as a way of mopping up liquidity in the country as it continues to grapple with inflation. By issuing more treasury bills the apex bank hopes to mop up more liquidity from the economy, diverting cash from from unproductive sectors of the economy to the central bank.
The apex bank can also encourage higher yields for treasury bills (especially the one year bills) as a way to combat inflation.
The government issue a total treasury bills amount of N3.9 trillion in 2022, according to data from the central bank.