FG To Borrow N120b From Local Debt Market

September 7, 2016

borrow money

By Modupe Gbadeyanka

A total of N120 billion (about $387m) would be borrowed by the Federal Government in local-currency denominated bonds at an auction on September 14, 2016, the Debt Management Office (DMO) disclosed on Tuesday.

The DMO said it would raise N40bn each from debt maturing in 2021, 2026 and 2036, using the Dutch auction system.

All the bonds are re-openings of previously issued debt.

The Federal Government has estimated it will borrow around N900bn from the local debt market this year to fund a budget deficit projected at N2.2tn.

The Central Bank of Nigeria has said it is planning to borrow N1.77bn via Treasury Bills in the last three months of the year.

In its fourth quarter Treasury bill issue programme released on Monday, the CBN said it would raise about N815.37bn, comprising 91 days, 182 days and 364 days debt instruments

In addition to the above, the central bank was also planning to raise about N952.05bn as rollover in the three categories of the instruments.

The nation’s overnight naira interbank lending rate eased to 16 per cent on Friday, down from 20 per cent recorded the previous Friday.

This followed improved naira cash liquidity after the disbursal of July budgetary allocations to Federal Government agencies.

The Federal Government distributes revenues from crude exports and taxes among the three tiers of government every month.

About N250bn ($751m) belonging to states and local government from July budget hit the banking system last week, and provided liquidity.

Total bank surplus cash with the CBN stood at N118bn on Friday, better than the N62bn recorded last Friday.

At the CBN’s Monetary Policy Committee meeting in July, the central bank raised its benchmark interest rate (Monetary Policy Rate) to 14 per cent in a bid to tighten liquidity.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

Leave a Reply

Previous Story

RenMoney Starts School Fees Loans

Next Story

NSE Moves 176.77m Shares Worth N1.89b

Latest from Economy

Don't Miss