FG sells more treasury bills to raise funds

Central Bank of Nigeria CBN, sold more treasury bills than it offered at an auction this week, it said on Friday, to mop up liquidity after the debt office cut the size of a domestic bond sale in view of its high borrowing costs.

The central bank raised N147.48 billion ($484 m) at a treasury bill sale on Wednesday, higher than the N83.24 billion it originally advertised, and yields remained unchanged at the auction.

It sold three-month paper at 14 percent to raise N39 billion  and offered 17.50 per cent for six-month bills which fetched N23.02 billion. It paid 18.68 percent for the one-year bill worth N85.46 billion.

On Wednesday, the debt office sold far less in bonds than it had offered as investors, worried about rising inflation in Africa’s largest economy, demanded higher yields from a government that is looking to spend its way out of recession.

Total subscriptions at the treasury bill auction stood at N185.97 billion, up from N156.56 billion at the previous sale last month, data from the central bank showed. CBN issues treasury bills regularly to help lenders manage their liquidity, curb rising inflation and provide naira to support the government fund its budget.