DMO to sell N430bn bonds this quarter

The Debt Management Office (DMO) plans to issue up to N430 billion local-currency bonds this quarter.

The office said on its website on Friday that it would auction N110 billion to N140 billion bonds maturing in 2021 and N85 billion to N105 billion debt maturing in 2026. It will also sell N45 billion to N55 billion in bonds maturing in 2027 and N100 billion to N130 billion of the 2036 debt.

According to the debt issuance calendar, the 2027 bond will be a new issue, in March. The rest will re-open previously issued debt, starting after Jan 18.

Africa’s biggest economy has proposed a 2017 budget deficit of N2.36 trillion for this year. The government hopes to fund it by borrowing N1.254 trillion domestically and N1.067 trillion abroad.

But the government has already struggled to fund the 2016 budget after a planned Eurobond sale and World Bank loan were delayed.

Meanwhile, the Central Bank of Nigeria (CBN) raised N172.85 billion from its first treasury bills of the year last week, with yields unchanged from the previous auction, held on December 21.

Dealers said the CBN sold N115.85 billion of one-year debt at a rate of 18.68 percent, the same as the previous auction.

They said the CBN also sold N35 billion of 91-day paper at 14 percent and N22 billion of six-month bills at 17.5 percent, unchanged from the previous auction.

The subscription at the auction came to N194.12 billion, well up from N42.68 billion at the previous auction.

CBN issues treasury bills regularly to help lenders manage their liquidity, curb rising inflation and provide Naira to help the government fund its budget.

However, at the foreign exchange market, it was a bad outing for the Naira as the market closed for the week at the parallel market, with the local currency weakening against all three major currencies.

The Naira lost three points to the dollar as it closed at N493 to a dollar on Friday, against N490 it traded on Thursday.

Also, the Pound Sterling and the Euro exchanged for N595 and N506, respectively.

At the Bureau De Change BDC window, the Naira traded at N399 to a dollar, the CBN-controlled rate, while the Pound Sterling and the Euro closed at N598 and N510 respectively.

The Naira, however, remained stable at the interbank window as it exchanged for N305.00 to a dollar.

Traders at the market said that the liquidity challenge was far from being resolved.

Similarly, the Federal Government said it will accept Naira from airlines which owe it in Dollar transactions, adding that the decision to accept Naira instead of Dollars was taken penultimate week by the government.

During the just concluded week, a Bloomberg analysis revealed that Bitcoin, the increasingly popular crypto currency or digital currency, was the best performing currency in 2016.

According to the analysis, the worst performing currency for 2016 was the Egyptian pound, which depreciated by 58.84 percent.

The Nigerian naira, which fell by 36.68 percent, was the fourth worst performing currency of 2016 — just ahead of the Egyptian pound, Suriname dollar, and the Venezuelan Bolivar.