Zenith Bank Plc has said it expects the volume of Nigerian Treasury Bills (NTBs) issuance to reduce in the short to medium term. This was disclosed in the tier-1 bank’s weekly economic intelligence report that was published earlier today.
The report is coming just days after the Central Bank of Nigeria (CBN) released its Treasury Bills calendar for the third quarter (Q3) of 2020.
As Nairametrics reported, the calendar showed the apex bank’s projection to raise about N822 billion between June and August this year.
Some 91-day tenured bills valued at N109.65 will be auctioned, along with 182-days bills worth N149.44 billion and another set of 364-days instrument worth N562.71 billion.
Zenith Bank’s reason for the projected reduction is because of the Federal Government’s decision to reduce the issuance of short-term financial instruments.
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“Given the policy decision by the Federal Government to reduce the issuance of short-term domestic instruments, the volume of NTBs issuance is expected to decline in the short to medium term. However, the need to sells NTBs to help government fund its budget deficit, as well as part of monetary control measures to manage banking industry liquidity and control the money supply may prompt the issuance of more bills in the medium to long term,” said part of the report by Zenith Bank.
It should be noted that Nigeria’s Domestic Debt Management Strategy (2018-2022) plans to reduce the country’s short-term debts (NTBs) by refinancing maturing Treasury Bills with external financing and FGN Bonds. This is with the intention of cutting down on the cost of borrowing, whilst lengthening the maturity of the debt stock.