Lagos - The Central Bank of Nigeria (CBN) will on Wednesday carry out the second of its bi-monthly Treasury Bill (T-bill) auction amid an air of uncertainty characterizing the local markets.
The primary offering will comprise 91-, 182- and 364-day papers valued at N 33.27 billion, N 50.28bn and N83.05 billion respectively and is open to licenced primary dealers and market makers (PDMMs).
Ahead of the auction, a myriad of uncertainties have characterized the markets, mainly the suspension of CBN Governor, Lamido Sanusi.
He was suspended for alleged “financial recklessness and misconduct.”
Prominent economic think-tank, Rand Merchant Bank summed up the events of the past few weeks.
“The CBN will carry out The short-end of the yield curve has edged higher since the beginning on March due to a cocktail of factors including a generalised sell-off in the EM debt on account of Fed tapering, the tightening of reserve ratios on public sector deposits, doubts over the lawfulness of the president’s decision to suspend governor Sanusi, and general concerns relating to the management of the local currency,” RMB stated on Wednesday ahead of the auction.
“Given the probability of further monetary tightening, deposit money banks might increase the scope of their bids to benefit from the high yields on the short-dated instruments,” the financial house projected.
T-bills are the most marketable money market security.
They are short-term securities that mature in one year or less.
They are issued through competitive auctions.
– CAJ News
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