CBN to sell N1.2trn treasury bills in Q1 2016

15 December 2015, Lagos -The Central Bank of Nigeria (CBN) plans to raise a total of N1.22 trillion from treasury bills sale in the first quarter of 2016.

CBN logo

CBN logo

The central bank said it would auction N245.77 billion worth of 91-day bills and N238.51 billion worth of 182-day paper between December 17 this year and March 3, 2016. In addition, it would sell N735.54 billion worth of 364-day treasury bills in the same first quarter of next year.

The apex bank issues treasury bills regularly as part of monetary control measures to help manage the volume of liquidity in the system and also to checkmate inflation.

The Monetary Policy Committee had noted at its last meeting the continued moderation in month-on-month inflation and reaffirmed its commitment to price stability, stressing the need for complementary supply side policies as part of an overall strategy to lock-in inflation expectations.
Broad money supply (M2) in the country contracted by 3.75 per cent in October, 2015, over the level at end-December, 2014. Also, annualised, M2 declined by 4.5 per cent, which was significantly below the growth benchmark of 15.24 per cent for 2015.

Net domestic credit (NDC) grew by 10.8per cent, which annualises to 12.96 per cent in the same period. At this level, NDC fell below the provisional benchmark of 29.30 per cent for 2015. Growth in aggregate credit reflected mainly growth in net credit to the federal government which grew by 96.66 per cent in October, although lower than the 142.38 per cent in September, 2015.

The sharp moderation in credit to government may be partly attributable to the effect of implementation of the treasury single account (TSA).

“The MPC considered that although, headline inflation had remained at the borderline of single digit, the observed moderation, especially in the month-on-month inflation, provided some room for monetary easing to support output in the short to medium term, while keeping in focus the primacy of price stability. In effect, the committee will continue to monitor developments around the Naira exchange rate, interest rates, and consumer prices, even as targeted measures are needed to channel liquidity to the key sectors of the economy.

“The committee noted with satisfaction the stability, soundness and resilience of the banking system even against adverse global financial conditions. Given the situation, the MPC emphasised the necessity of focusing on financial market stability and proactive engagement of policy and administrative levers needed to support the environment in which market institutions operate. On their part, market institutions are encouraged to employ more stringent criteria in evaluating their portfolio and business decisions,” the committee had stated.


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