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CBN Sells N173bn Treasury Bills At 51% Rate

Posted: 06 January, 2017 at 08:00 am
CBN Sells N173bn Treasury Bills At 51% Rate
CBN Sells N173bn Treasury Bills At 51% Rate Photo 1

On Wednesday, the Central Bank of Nigeria (CBN) sold about N172.85 billion as its first Treasury bill record sale of the year.

While On Thursday, some permanent income traders declared that the record sale of the treasury bill is unchanged from previous sale on December 21.

According to the traders, the CBN sold N115.85 billion of a year debt at the rate of 18.68 per cent, corresponding with previous sale.

The traders also explained that CBN further sold N35 billion of 91-day bills at 14 % while N22 billion of six-months bills at 17.5 %, which is corresponding to previous sale.

Following the Treasury bills issues, CBN plans to assists in control rising price and provide naira to support government with their budget

The financial policy Committee as set the standard monetary policy rate at 14%, in which price rises also place at 18.48 % during December.

Mr. Godwin Emefiele, the CBN President points out the interest rates, saying it was a real tool for controlling price rises.

Following the price rises at 18%, Mr Emefiale said “the CBN would be abjectly failing on one of its cardinal objectives if it cuts interest rates at this time.”

He said the low interest should be based on facts rather than politics or sentiment.

The CBN President stated:“For those who say we need a rate cut to spur growth, we need to remind that high inflation is highly inimical to economic growth. Indeed, many empirical studies have estimated the threshold level at which inflation becomes significantly growth retarding to be 11 percent for developing countries.

“With ours at 18.3 per cent, one must question the judgment of cutting interest rates at this time. Finally, I think it is important to underscore that interest rates reflects not just the cost of capital but also the cost of doing business, and so we need to also look at interest rates from the perspective of the lender.

“Given that most banks have decided to individually provide security, power, and other infrastructure, it is not surprising that some of these costs are passed on to customers in the form of high interest rates.

Notwithstanding these facts, we will continue to use moral suasion to encourage commercial banks to be more considerate in interest charges on customers,”

CBN are working on stability of Naira against Dollar, while recently Naira is sold at N490 in the market.

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