The Central Bank of Nigeria said it has concluded all arrangement to sell N234.89 billion ($765.99 million) of short-dated treasury bills at an auction market on April 6.
It also said that it plans to sell N35 billion of three-month debt, N33.49 billion of six-month bills and N166.40 billion of one-year notes, using a Dutch auction system, adding that payment will be due the day after the auction.
However, the CBN issues treasury bills twice a month to finance the budget deficit, help manage commercial lenders’ liquidity and curb rising inflation.
Nigeria, one of top crude oil producers in Africa, has, in two consecutive auctions this month, sold the one-year treasury bills at yields above the prevailing inflation rate, in a bid to lure investors to buy more of the debt.
Meanwhile, trading activities at the Nigeria’s stock market dropped by 22.3 per cent to N74.1 billion ($236 million) in February, from a month ago, data from the stock market has shown.
Nigeria is battling a currency crisis, brought on by low prices for oil, its main export, and now operates multiple currency regimes, dominated by the CBN’s intervention, making it difficult to price assets.
It has several exchange rates – the official one, the black market, a rate for Muslim pilgrims going to Saudi Arabia, and a retail rate set by exchange bureaus.
Last Monday, the apex bank set a new naira rate for consumers with certain foreign expenses and stepped up dollar sales, but analysts doubted whether the moves would draw foreign investors back to Africa’s largest economy.
The stock market was one of the world’s best performing frontier markets until 2013, but low liquidity levels and currency restrictions have deterred foreign investors.
Foreign transactions on the stock exchange hit N1.54 trillion ($4.9 billion) in 2014, when oil prices were at a peak, but declined to N518 billion last year, as crude prices plunged, the NSE said.
If index provider by MSCI fulfils a threat to drop Nigeria from its frontier equity benchmark, when it reviews its indices in May, foreign trades could fall further.
Nigerian shares have lost 5.2 per cent so far this year, after a 6.2 per cent fall last year. In dollar terms, they shed 40 per cent in 2016 as the naira fell by a third on the official market, due to CBN reforms.
The NSE said foreign investors traded shares valued at N74.1 billion last month, down from N95.3 billion in January, with sales accounting for more than half of those transactions.
