Rates to moderate as N218.367bn worth T-Bills offset auctions

Money Market Rates are expected to moderate as maturing treasury bills worth N216.367 billion are expected to offset the impact of treasury bills auctions worth N242.396 billion.

Dealers said, treasury bills worth N218.367 billion will mature via primary market, viz: 91-day bills worth N21.148billion, 182-day bills worth N80 billion; and 364-day bills worth N117.219billion as well as in the secondary market, viz: 185-day bills worth N72.898billion.

The maturities according to a dealer, Cowry Assets Management Limited, will more than offset  treasury bills auctions worth N242.396billion via primary market, viz: 91-day bills worth N45.177billion and182-day bills worth N80 billion and 364-day bills worth N117.219 billion.

“Hence, we anticipate a moderation in interbank lending rates,” the firm said in a note to investors on Friday.

Nigeria plans to raise around N242 billion ($772 million) in short-dated treasury bills at an auction on February 1, according the Central Bank.

It stated that Payment will be due the day after the auction.

Nigeria issues treasury bills to fund its budget deficit, manage banking system liquidity and curb rising inflation.

Meanwhile, the Federal Government has disclosed that it will look to issue a debut diaspora bond by March to raise funds from Nigerians abroad, after completing a $1 billion euro-bond sale this month. Nigeria is in its first recession in 25 years and needs to find money to make up for shortfalls in its budget.

Low prices for crude and militant attacks in its crude-producing heartland, the Niger Delta, have slashed its oil revenues.

The country first announced plans to sell diaspora bonds in 2013 to raise between $100 million to $300 million, but the government at the time could not finish appointing bookrunners for the sale before an election that swept the opposition into office. The government plans to borrow up to $10 billion, with about half of that coming from foreign sources as it seeks to boost overseas loans to plug funding gaps and lower costs. But so far only the African Development Bank has publicly confirmed a budget support package of $1 billion. The government has held talks for months with the World Bank, China and other institutions to fund the budget gaps. In December, the government appointed Citigroup, Standard Chartered Bank and Stanbic IBTC Bank to manage the $1 billion euro-bond sale, which it hopes to begin marketing in January.