The Federal Government may have concluded arrangements to raise N155.39 billion ($780 million) in Treasury Bills (T-Bills), with maturities ranging from three months to one year on December 16.

The Central Bank of Nigeria said the T-Bills programme would include a N20 billion worth of three-month paper; N25 billion for six-month paper; and N110.39 billion for the one-year bills, through the Dutch Auction System.

The Dutch auction system is a method of pricing shares/market instruments, whereby the price of the security offered is lowered until there are enough bids to sell all the quantities offered, which must be then sold at that price.

Already, traders have expressed optimism that the instrument will be oversubscribed, while yields are likely to drop further from the last auction of short-dated paper by next week, in tandem with the prevailing trend in the secondary (retail) market.

Last week, the Debt Management Office, auctioned N129 billion in bonds, Indeed, followed by a N50 billion local currency denominated bond due December 9.
The bonds auction was a reopening of previously issued papers- February 2020 (N30 billion) and March 2024 (N20 billion).

Meanwhile, the naira fell two percent to a low of N251 to the dollar in the parallel market yesterday, CBN reduced its dollar supplies to bureaux de change operators due to incomplete documentation, with the suspension of over 1800 that were affected.

Credit: Guardian