The Central Bank of Nigeria (CBN) sold treasury bills worth N227.91
billion last week. The Financial Market Dealers Association (FMDA)
disclosed this on its Website on Friday. FMDA said that five categories
of treasury bills were sold at the last biweekly auctions.
It said the auctions included the Open Market Operation (OMO) which comprised the 139-day and 128-day tenor bills. FMDA said that N59.53 billion worth of 139-day bills were sold, while N110.8 billion worth of 128-day treasury bills were sold. The 139-day and 128-day tenor bills had yield rates of 13.32 per cent and 13.03 per cent, respectively. It also said that the 91-day, 182-day and 364-day tenor bills were auctioned at the Primary Market Auction (PMA)
“The three bills – the 91-day, 182-day and 364-day tenor bills – worth N25.65 billion, N31.25 billion and N50.68 billion, respectively. They traded at yield rates of 9.20 per cent, 12.45 per cent and 14.30 per cent, respectively,“ the association said. A major development in the money market this week was the retention of the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN).
CBN Governor, Malam Sanusi Lamido Sanusi, announced the retention of the MPR and Cash Reserve Ratio (CRR) on May 22. The announcement came after a two-day meeting of the apex bank’s Monetary Policy Committee in Abuja.
The MPR, one of the monetary policy instruments of CBN, is the benchmark lending rate and the rate at which the CBN lends to commercial banks. The apex bank retained CRR at 30 per cent and pegged MPR at 12 per cent. Another important development this week was the CBN’s advice to the Federal Government not to spend too much on the state of emergency declared in three states.
Sanusi said that excessive spending on the emergency rule could be inflationary. Mr Remi Alarape, Managing Director, Remmy Associates Ltd., said that the retention of MPR at 12 per cent was a negation of development aspirations of Nigerians.
He said the MPR rate could slow down economic growth. Alarape said that the issue of diversification of the economy should be given more attention, adding that the economy was currently structurally imbalanced.
“Until our government gives more attention to the industrial and the agricultural sectors, the CBN’s monetary policies will continue to achieve undesirable results,” he said.
Dr Deji Thomas, a Senior Lecturer, Department of Economics, University of Lagos, said no nation could achieve sustainable growth with a high MPR regime. Thomas suggested that the challenges of improving the nation’s infrastructure needed to be taken more seriously.
“If we have the infrastructure in place, foreign investors will be attracted into the country and our productivity will improve, while more jobs will be available, “ he said. Thomas hailed the retention of the CRR, saying it was a step in the right direction.
It said the auctions included the Open Market Operation (OMO) which comprised the 139-day and 128-day tenor bills. FMDA said that N59.53 billion worth of 139-day bills were sold, while N110.8 billion worth of 128-day treasury bills were sold. The 139-day and 128-day tenor bills had yield rates of 13.32 per cent and 13.03 per cent, respectively. It also said that the 91-day, 182-day and 364-day tenor bills were auctioned at the Primary Market Auction (PMA)
“The three bills – the 91-day, 182-day and 364-day tenor bills – worth N25.65 billion, N31.25 billion and N50.68 billion, respectively. They traded at yield rates of 9.20 per cent, 12.45 per cent and 14.30 per cent, respectively,“ the association said. A major development in the money market this week was the retention of the Monetary Policy Rate (MPR) by the Central Bank of Nigeria (CBN).
CBN Governor, Malam Sanusi Lamido Sanusi, announced the retention of the MPR and Cash Reserve Ratio (CRR) on May 22. The announcement came after a two-day meeting of the apex bank’s Monetary Policy Committee in Abuja.
The MPR, one of the monetary policy instruments of CBN, is the benchmark lending rate and the rate at which the CBN lends to commercial banks. The apex bank retained CRR at 30 per cent and pegged MPR at 12 per cent. Another important development this week was the CBN’s advice to the Federal Government not to spend too much on the state of emergency declared in three states.
Sanusi said that excessive spending on the emergency rule could be inflationary. Mr Remi Alarape, Managing Director, Remmy Associates Ltd., said that the retention of MPR at 12 per cent was a negation of development aspirations of Nigerians.
He said the MPR rate could slow down economic growth. Alarape said that the issue of diversification of the economy should be given more attention, adding that the economy was currently structurally imbalanced.
“Until our government gives more attention to the industrial and the agricultural sectors, the CBN’s monetary policies will continue to achieve undesirable results,” he said.
Dr Deji Thomas, a Senior Lecturer, Department of Economics, University of Lagos, said no nation could achieve sustainable growth with a high MPR regime. Thomas suggested that the challenges of improving the nation’s infrastructure needed to be taken more seriously.
“If we have the infrastructure in place, foreign investors will be attracted into the country and our productivity will improve, while more jobs will be available, “ he said. Thomas hailed the retention of the CRR, saying it was a step in the right direction.
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