FG to Auction N500bn T-Bills Today as N2.47tn Liquidity Enters Market

Nume Ekeghe

The federal government is set to raise N500 billion through a Treasury Bills auction today as an estimated N2.47 trillion is projected to flow into the financial system this week, further strengthening liquidity conditions in the market.

The auction, to be conducted by the Central Bank of Nigeria (CBN) on behalf of the Debt Management Office (DMO), comprises N100 billion of 91-day bills, N100 billion of 182-day bills and N300 billion of 364-day bills. 

The auction comes as system liquidity has already risen sharply. The Financial Markets Dealers Association (FMDA), in its latest weekly market snapshot, said liquidity improved 15.97 per cent to N2.86 trillion from N2.46 trillion, after about N4.45 trillion entered the financial system during the previous week. 

For this week, the market is expecting another N2.47 trillion in inflows, dominated by N2.27 trillion in OMO maturities. FGN bond coupons are expected to contribute N166.62 billion, while Treasury Bills and commercial paper maturities are projected at N28.04 billion and N5.51 billion respectively. 

FMDA said, “Looking ahead, an estimated N2.47 trillion is expected to flow into the system this week, with OMO maturities accounting for about 92% of projected inflows.” 

The sizeable inflow, according to FMDA, comes as Treasury Bills yields have moderated across most tenors. 

Average Treasury Bills yield stood at 18.77 per cent as of September 18, compared with 18.57 per cent a week earlier. The one-month, three-month and six-month bills yielded 17.88 per cent, 17.85 per cent and 19.04 per cent respectively, while the 12-month bill stood at 19.31 per cent.