The Central Bank of Nigeria (CBN) is set to re-issue N2.2 trillion worth of maturing Nigerian Treasury Bills (NTBs) in the fourth quarter of 2024.
This is according to the newly released 2024 Issue Calendar seen by Nairametrics.
The re-issuance program is part of the government’s ongoing efforts to manage liquidity, sustain the financial market, and maintain economic stability.
Breakdown of Issuances
The calendar provides a detailed breakdown of auction and settlement dates as well as the volume of NTBs set for re-issuance.
- The total re-issuance for the quarter includes N158.8 billion in 91-day bills, N109.6 billion in 182-day bills, and N1.9 trillion in 364-day bills, amounting to a total of approximately N2.2 trillion.
- Starting with the auctions scheduled for September 4-5, 2024, a total of N233.3 billion will be issued across 91-day, 182-day, and 364-day maturities.
- Following the initial auction, the CBN has slated another NTB issuance for September 11-12, 2024, where a total of N161.9 billion will be re-issued.
- Later in the month, on September 25-26, 2024, the CBN will conduct another issuance of N227.5 billion in NTBs, with the 364-day bills commanding the largest share of the issuance.
- As the quarter progresses, the auction scheduled for October 9-10, 2024, will see the CBN re-issue NTBs worth N81.9 billion. Although this issuance is relatively smaller compared to others in the quarter, it still plays a crucial role in maintaining liquidity in the financial markets.
- On October 23-24, 2024, the re-issuance program will gain momentum with a more significant auction totaling N374.7 billion across 91-day, 182-day, and 364-day maturities.
- Another re-issuance of the quarter is scheduled for November 6-7, 2024, where the CBN will issue NTBs totaling N513.4 billion. This auction represents the second largest single re-issuance of the quarter and is expected to draw considerable interest from investors seeking secure and high-yielding investments.
- The final auction for the quarter, scheduled for November 20-21, 2024, will close out the re-issuance program with an issuance of N610.8 billion. This closing issuance will ensure that the financial system remains liquid as the quarter comes to an end, while also providing the government with the necessary funds to meet its short-term obligations.
What you should know
The re-issuance of NTBs is a strategic tool used by the CBN to manage liquidity in the financial system, control inflation, and stabilize the naira.
By rolling over maturing bills, the CBN aims to mitigate the impact of maturing obligations on government finances while providing investors with a relatively safe investment option.
However, there are concerns over the rising interest rates and the costs to government revenue.
Nairametrics earlier reported that the Central Bank of Nigeria (CBN) incurred an estimated N1.55 trillion in interest payments for the 12 successful Treasury Bills (T-Bills) auctions conduced in the first six months of 2024.
The interest costs in 2024 were approximately 654.7% higher than the N205.63 billion recorded the same period of the previous year.
Data from the apex bank reveals that the apex bank has sold Treasury Bills worth N8.4 trillion in the first half of the year for tenors ranging from 91-days, 182-days and 364-day bills.
The stop rate, which is the interest rates accepted from the bids on offer, ranged from as low as 2.44% for some 91-day bills to as high as 21.49% for 364-day bills within the period under review.
The high interest cost is largely due to the central bank’s hawkish monetary policy aimed at curbing rising inflation rate. The central bank jacked up rates aggressively early in 2024 as part of its policy tools to mop up money supply from the economy.