In its bid to fight inflation in the country, the Central Bank of Nigeria (CBN) has gone borrowing, targeting the sum of $773.44 million through the issuance of Treasury bills.
The bank said the bills’ maturities will range between three months and one year as from Wednesday.
In line with the Treasury bill issuance calendar, N45.18 billion will mature in 3-month debt, N80 billion in six-month and N120bn in one-year bills, all by the Dutch auction.
Indicative for the auction are 16 per cent for three-month, 18 per cent for six-month and 18.5 per cent for one-year bills.
Reports say several options are available for the government to reduce much cash in circulation in the country, of which Treasury bills is one of such.
Another is targeted at converting the contribution pension fund, which stands at more than N5 trillion.
But experts have frowned at government tampering with the retirement funds on the reason that it may lead to abuse.
This is even as the CBN claims that with the high yields on fixed income securities in recent months, mopping up naira liquidity to try to lure back foreign investors who sold naira assets following the plunge in the price of oil will be easy.
Penultimate week, the CBN Monetary Policy Committee raised the Monetary Policy Rate (MPR) by 200 basis points from 12 per cent to 14 percent hinging its decision on the fight against corruption.
The MPR hit a 10-year high of 16.5 per cent in June.
Experts have linked the fall of naira with other currencies, exchanging at 310.50 against the dollar at the interbank market on Tuesday, as a very critical development to the economy.
The naira had dropped to 382 against the dollar at the parallel market on Monday, down from the 380 it closed on Friday sending policy makers rallying the private sector for a way out.
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