Posted by On March 13, the CBN will conduct a Primary Market Auction (PMA) for Treasury Bills (T-Bills).
Treasury notes, or T-bills, are tradable financial instruments that serve two purposes: first, to fund government operations; and second, to allow the central bank to implement monetary policy.
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The maturity date of T-bills, or short-term instruments, is one year or less after the date of issuance. Maturities of 3, 6, and 12 months are common for issuing them.
Current T-Bills with maturities of 91 days, 182 days, and 364 days will be rolled over and settled at the PMA for a total of N161.50 billion (N730 million, N920 million, and N159.85 billion, respectively).
We expect rates across all triple instruments to remain around current levels in the forthcoming auction. This notion is further reinforced by the fact that the reduced offer size would discourage substantial investor involvement.
Still, we must not forget that the central bank has pledged to keep an eye on liquidity and make sure that fixed income rates match the current yield situation. “This coordinated effort is intended to maintain rates at levels that are appealing to investors,” stated Meristem Wealth Management Limited before to the T-Bills auction.