2017 Budget Funding: CBN eyes N62.4bn from Treasuty Bill sale
As bankers bear the brunt of government borrowing, via sale of treasury bills and bonds by CBN & DMO, there is no sign that relief may be on its way…Read more:
Nigeria’s inability to secure foreign loan facility to fund the $2.3 billion deficit in 2017 budget has forced its central bank to adopt sale of Treasury Bills, twice in a month, for the rest of the year, even as it has concluded plans to raise N62.43 billion on Wednesday from the bills’ sale.
Believed to be the highest haul in the past months, the apex bank said the bill will be auctioned on two paper batches of N32.43 billion, in three-month and N30 billion in six-month bill.
In a statement on Wednesday, the Finance and Treasury unit of CBN said unlike some other deals in the past the results of the auction will be announced on the same day.
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Apart from CBN, the Debt Management Office (DMO) is said to be concluding arrangements to up its frequency to the money market, also as part of the internal borrowing approach to encourage both local and foreign lenders to pick interest in Nigerian economy, which had experienced the worst recession in 2016.
However, bankers are already feeling the pinch of being constantly subjected to be looking for money with which to meet their obligation of patronising the various financial instruments that CBN and BMO have been coming to the interbank market with.
But the CBN spokesman, Isaac Okoroafor, said there is no evidence that the banks were finding difficult to participate in the treasury bill transactions.
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“It (Treasury Bill sale) is part of banking business, which is in practice all over banking world,” Okoroafor maintained.
Observers say the frequency at which the regulators and agencies are transacting treasury bill and other financial instruments will continue to create tension in the banking system as most of the banks rush to over night cash loan with higher interest rates.