CBN Targets N500 bln from Treasury Bills Auction Midweek
The Central Bank of Nigeria (CBN) is scheduled to auction N500 billion worth of Treasury bills on Wednesday amidst a significant liquidity profile in the financial system.
The CBN will sell Treasury bills across three standard tenors: 91-, 182-, and 364-day bills. Market analysts said subscription will remain concentrated at the long tenors, based on the previous auction data.
Amidst a tight supply target, subscription would be heavy, analysts said, citing robust financial system liquidity and heavy inflows from maturing instruments.
The market anticipates more than N2.5 trillion inflows from expired OMOs and Treasury bills to bolster the financial system position, including coupon payments.
The new week is set to witness a substantial liquidity injection, with approximately N2.27 trillion in OMO maturities, N183 billion in bond coupon payments and N28 billion in NTB maturities scheduled to settle.
Investment firm Cowry Asset Limited said combined, these inflows amount to approximately N2.48 trillion, equivalent to a significant portion of the current N2.86 trillion system liquidity balance.
Analysts said the concentrated OMO maturities early in the week are likely to lift system liquidity sharply, potentially easing overnight funding costs in the money market.
Given the expected surge in liquidity and the CBN’s ongoing sterilisation efforts, Cowry Asset Limited said another OMO auction appears likely to prevent liquidity from building up excessively.
Consequently, money-market conditions could remain relatively fluid, with short-term rates dependent largely on the timing and size of the CBN’s sterilisation operations.
