The Central Bank of Nigeria (CBN) said it will issue fresh treasury bills (TBs) worth N1.02 trillion in the fourth quarter (Q4’18) to replace maturing TBs of the same amount during the quarter.
The apex bank disclosed this in its TB issuance programme for the fourth quarter released during the weekend.
The fresh TBs to be issued during the quarter comprised N62.6 billion worth of 91-Days TBs, N148.7 billion worth of 182-Days TBs and N812.4 billion worth of 364-Days TBs.
Financial Vanguard analysis showed that from this week to the end of this month, the CBN will issue N318.5 billion of TBs comprising N11.6 billion worth of 91-Days bills, N12.4 billion worth of 182-Days bills and N294.5 billion worth of 364-Days bills.
In October, the apex bank will issue N281.1 billion worth of TBs comprising N15.4 billion worth of 91-Days bills, N46.8 billion worth of 182-Days bills and N218.9 billion worth of 364-Days bills.
In November, the apex bank will issue N424 billion worth of TBs comprising N35.6 billion of 91-Days bills, N89.4 billion worth of 182-Days bills and N299 billion worth of 364-Days bills.
… Interbank to record N800bn net inflow
Meanwhile, the interbank money market will record net liquidity inflow of N800 billion this month, indicating persistence of excess liquidity in the market throughout the month.
According to analysts at FSDH Merchant Bank, the interbank money market will receive inflow of N1.67 trillion from the various maturing government securities and Federation Account Allocation Committee (FAAC) in September 2018. Total outflow from the various sources, including government securities and statutory withdrawal, is estimated at N871 billion leading to a net inflow of about N800 billion.
Last week, the excess liquidity in the market was aggravated by inflow N737.52 billion comprising N445 billion from statutory allocations to states and local government, and N292.52 billion from matured OMO bills.
In a bid to address the liquidity upsurge, the CBN conducted three OMO bills auctions resulting to outflow of N498.59 billion from the market.
However, the market still closed with excess liquidity of N540 billion leading to the third consecutive weekly decline in cost of funds.
Data from FMDQ showed that interest rate on Collateralised (Open Buy Back, OBB) lending fell by 317 basis points (bpts) to 2.83 percent on Friday from 6.0 percent the previous week. Similarly, interest rate on Overnight lending fell by 341 bpts to 3.42 percent on Friday from 6.83 percent the previous week.
