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Nigeria sells 110 bln naira in bills, yields up



Monday October 31, 2011 3:28pm



Nigeria sold 110.11 billion naira ($703.80 million) in short-dated treasury bill at an auction on Thursday with yields on the papers rising for the second consecutive auction, the central bank said on Monday.


The central bank sold 30 billion naira in the 91-day treasury bills at a 15.29 percent marginal rate, 48.73 billion naira in the 182-day paper at 16.29 percent and 31.38 billion naira in the 364-day bills at 16.49 percent respectively.


The regulator sold the 91-day bill at a 15 percent marginal rate, 182-day paper at 16 percent, and the 364-day bill at 16.22 percent at its last auction on Oct. 13.


Traders said the increase in yield on the treasury bills reflects rising interest rates in the money market as a result of the recent central bank benchmark rate hike.


Nigeria early in the month hiked its benchmark interest rate by 2.75 percent to 12 percent and implemented a series of measures to free up dollar supply and tighten naira liquidity, causing rapid increase in yields on fixed income across board and soaring lending rate.


Sub-Saharan Africa's second biggest economy issues treasury bills regularly as part of monetary control measures to help lenders manage their liquidity.


Total subscription stood at 236.57 billion naira compared to 224.04 billion naira at the previous auction. ($1 = 156.450 Naira)        



Source: Reuters (Reporting by Oludare Mayowa)

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