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HomeTop NewsNigeria's central bank raises yield on 1-year Treasury Bill to 3.2%

Nigeria’s central bank raises yield on 1-year Treasury Bill to 3.2%

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By Oludare Mayowa

The Central Bank of Nigeria (CBN) in a surprise move on Wednesday raised yields on its 1-year Treasury Bills instrument to 3.20 percent at this week’s auction from 0.15 percent at the previous auction two weeks ago.

Details of the auction showed that the regulatory bank also increase returns on the 6-month paper to 0.60 percent from 0.09 percent previously, but lower the yield on the 3-month paper to 0.01 percent against 0.02 percent previously.

The bank sold a total of N50.92 billion worth of the Treasury bills across the three tenor paper on offer despite the huge subscription by investors at the auction.

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Total subscription stood at N102.95 billion with demand heavier on the 3-month treasury bill at N48.12 billion followed by N42.71 billion demand for the 1-year paper and the least of N12.12 billion demand in the 6-month paper.

Nigeria’s central bank sell Treasury Bills twice monthly as part of its liquidity management measures and to raise short term money for the government treasury.

The CBN said it plans to introduce special bills of 90-day tenor a new monetary tool to manage system liquidity.

The regulator said last week that the new fixed income assets was part of its efforts to deepen the financial markets and avail the monetary authority with an additional liquidity management tool.

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