Stability of interbank rates expected as T-bills maturities offset auctions

There are  expectations of further financial system liquidity ease and resultant stability in interbank rates as  maturing treasury bills worth N314.558 billion more than offset a N229.14 billion worth of Treasury bills auctions.

The Central Bank of Nigeria (CBN) is planning to issue N229.14 billion in Treasury bills at an auction on August 2.

The bank said it will issue N29.14 billion in three-month bills, N80 billion in six-month paper and N120 billion in one-year bills.

These are expected to be offset by t-bills maturities viz: 91-day bills worth N29.143billion, 182-day bills worth N80 billion, 364-day bills worth N120 billion, 143-day bills worth N2.79 billion and 181-day bills worth N82.62 billion.

“Hence, we expect further financial system liquidity ease and resultant stability in interbank rates,” dealers from Cowry Assets Management Limited stated.

Another said he expect the CBN to float several Open market operation (OMO) auctions .this week to keep financial system liquidity tight.

The central bank issues Treasury bills twice a month  help the government  finance its budget deficit, curb money supply growth and to help lenders manage their liquidity.

The bill comes after the government disbursed budget allocation to its agencies, prompting the central bank to mop up excess liquidity.