The Central Bank of Nigeria sold a total of N114.6 billion worth of treasury bills yesterday, in its first such auction since mid-July as it seeks to boost dollar liquidity in the currency market.
The Bank offered to sell N100 billion of bills in maturities of three, six and 12 month, but got bids of N454.9 billion, with the one-year paper winning around 80 per cent of the demand.
“It is a surprise auction. I don’t know why they are floating it without prior announcement,” Reuters quoted one trader to have said.
“This one-off might not help dollar liquidity unless they become consistent in the offering.”
The Bank sold the most-liquid one-year bill at 12 per cent on Wednesday, lower than the 12.25 per cent it paid at its last auction in July and compared with as high as 18 per cent it fetched a year ago.
Forex trading was thin on Wednesday. The naira closed at N362.83 to a dollar yesterday, slightly lower than the N362.63 per dollar it closed the previous day, on the investor and exporters’ forex window.
The central bank was conducting regular weekly OMO auctions until July, when it switched focus to trying to boost economic output following recession by telling banks to lend more or face a rise in minimum reserve requirements.