CBN Offered N7.33trn Treasury Bills in Six Months

•FG’s domestic debt increased by N3.28trn in H1 as debt service rose to 40.74%

•Renews bilateral currency swap agreement with China

James Emejo in Abuja

The Central Bank of Nigeria (CBN) yesterday said it offered treasury bills amounting to N7.33 trillion in the first half of the year (H1 2022) while total public subscriptions amounted to N10.94 trillion.

The bank also stated that the total outstanding FGN domestic debt stock amounted to N20.91 trillion, representing an increase of N3.28 trillion or 18.59 per cent outstanding as of June 2022, which was higher than the N17.63 trillion recorded in June 2021.

This was contained in the CBN Financial Market Half-Year Activity Report 2022, which was obtained from the central bank’s website yesterday.

Consequently, the report noted that the cost of debt service increased by 40.74 per cent to N1.37 trillion at half-year compared to N977.03 billion in June last year, due to the increase in borrowings by the federal government.

The apex bank further stated that a total of $9.30 billion was sold at the foreign exchange market including spot sales worth $4.39 billion or 47.57 per cent and forwards sales of $4.84 billion during the review period.

The CBN explained that it sustained its intervention in the foreign exchange market during the review period to enhance supply, moderate demand pressures, and preserve the value of the naira, stressing that intervention was made through sales for invisibles, small and medium enterprises and at the Investors’ & Exporters’ window and interbank secondary market intervention sales.

The CBN further disclosed that it made purchases from autonomous sources, particularly from oil-producing and servicing companies.

Nonetheless, the central bank pointed out that the increase in the subscription to treasury bills was largely attributed to investors’ appetite for risk-free assets and stable yields on the National Treasury Bills (NTBs).

The bank noted that the structure of allotment in the first half of the year indicated that commercial banks took up N1.78 trillion or 73.78 per cent, mandate and internal funds customers accounted for N564.50 billion or 23.37 per cent, while merchant banks took up the balance of N68.87 billion or 2.85 per cent.

The central bank also revealed that the implementation of the three-year N720.00 billion/CNY15.00 billion Bilateral Currency Swap Agreement between the Bank and the People’s Bank of China (PBoC), which commenced in July 2018, was renewed in April 2021 for another three-year term.

The bank noted that a total of CNY1.26 billion was sold in 13 auctions during the review period, compared with CNY1.22 billion in 13 auctions in the corresponding period of 2021, thus, bringing the total sales from the inception of the currency swap to June 2022 to CNY7.04 billion.

The report further stated that the Nigerian stock market remained bullish in the first half of the year as against the bearish trend observed in the corresponding period of 2021.

It stated that the All-Share Index (ASI) and market capitalisation opened at 43,026.23 points and N23.18 trillion, respectively, in January and increased to close at 51,817.59 points and N27.94 trillion, respectively in June 2022.

The ASI increased by 8,791.36 points or 20.43 per cent, while the MC increased by 4.76 trillion or 20.53 per cent while in the corresponding period of 2021, the ASI and MC opened at 41,147.39 points and N21.52 trillion and declined by 3,240.11 points or 7.87 per cent and N 1.76 trillion or 8.18 per cent to 37,907.28 points and N19.76 trillion, respectively, at end-June 2021.