CBN Offered N7.33trn Treasury Bills in Six Months

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In the first half of the year (H1 2022), the Central Bank of Nigeria (CBN) claimed it provided treasury bills worth N7.33 trillion, while total public subscriptions came to N10.94 trillion.

Treasury bills are short-term securities issued at a discount for a tenor ranging from 91 to 364 days, such that the income received is the difference between the purchase price and the amount received at maturity or prior to the sale.

The bank also reported that as of June 2022, the total outstanding FGN domestic debt stock stood at N20.91 trillion, an increase of N3.28 trillion or 18.59 percent over the N17.63 trillion recorded in June 2021.

The CBN Financial Market Half-Year Activity Report 2022, which I downloaded from the central bank’s website yesterday, contained information to this effect.

Consequently, the report noted that the cost of debt service increased by 40.74 percent to N1.37 trillion at half-year compared to N977.03 billion in June last year, due to the increase in borrowings by the federal government.

The apex bank further stated that a total of $9.30 billion was sold at the foreign exchange market including spot sales worth $4.39 billion or 47.57 percent and forward sales of $4.84 billion during the review period.

The CBN stated that it continued to intervene in the foreign exchange market throughout the review period in order to increase supply, reduce demand pressures, and maintain the value of the naira. It emphasized that this intervention was accomplished through sales for Invisibles, small and medium-sized businesses, at the Investors’ & Exporters’ window, and interbank secondary market intervention sales.

The central bank still emphasized that the rise in treasury bill subscriptions was mostly attributable to investors’ desire for risk-free investments and stable returns on the National Treasury Bills (NTBs).

The bank noted that according to the allocation structure for the first six months of the year, commercial banks received N1.78 trillion, or 73.78 percent, mandate and internal funds customers received N564.50 billion, or 23.37 percent, and merchant banks received the remaining N68.87 billion, or 2.85 percent.

The People’s Bank of China (PBoC) and the Bank implemented a three-year, N720.00 billion/CNY15.00 billion bilateral currency swap agreement that started in July 2018 and was extended in April 2021 for an additional three years.