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CBN to borrow N129.6Bn on Wednesday through treasury bills

The Central Bank of Nigeria is set to borrow about N129.67bn ($403.01m) in short-dated Treasury bills at an auction on Wednesday.



The Apex bank said it would raise N28bn in three-month paper, N33.49bn in six-month bills and N68.18bn in one-year bills.

Payment for the purchases will be made on Thursday, a public notice by the Lender stated.

The Federal Government issues Treasury bills to raise cash to fund the budget deficit, manage banking system liquidity and curb rising inflation.

The nation’s interbank lending rates were flat at around 15.25 per cent for overnight lending on Friday, even as market liquidity dropped significantly because of persistent Treasury bill sales by the central bank.

Traders said market liquidity should be below N100bn due to consistent cash withdrawal by the CBN via Treasury bill sales, although data on commercial lenders’ cash balance with the central bank was not available on Friday, Reuters reported.

Traders said the CBN had sold around N1.2tn ($3.73bn) in Open Market Operations Treasury bills at 14 auctions in one month in its bid to reduce liquidity in the banking system and curb pressure on the foreign exchange market.

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