Nigeria Cbank resumes liquidity tighten, sells 450 bln naira debt to tame inflation

Nigeria central bank resumed liquidity tighten on Monday after data showed inflation figure marginally slowed at 15.9 percent, an indication that the monetary authority is far from achieving price stability despite the substance of tight monetary stance.
The bank had suspended the issuance of fresh short-dated debt for the rest of the year after the Debt Management Office (DMO) retired around 340 billion naira in the matured paper last week.
The debt office also plans another repayment of maturing Treasury bill this week in furtherance of its proposal to refinance maturing debt with foreign loans.
Nigeria has issued $3 billion in EUROBOND this month as part of measures to finance part of this year's budget deficit and also refinance maturing short-dated treasury bills.
Primary market auction of treasury for the rest of the year was suspended, pushing up the level of liquidity in the money market and exerting pressure on the foreign exchange market.
Many foreign portfolio investors were seen closing their position in the local debt market and buying up dollar to exit the market, leading to the depreciation of the local currency on both the black market and investors forex window.
However, at the resumption of treasury bill auction on the Open Market Operations (OMO) by the central bank on Monday about 450 billion naira debt was sold.
The bank initially offered 200 billion naira of 101-day tenor treasury bills and 250 billion naira in 255-day tenor debt. However, there was overwhelming subscription by commercial lenders resulting in the bank allocating more bills to cover the excess subscription submitted by investors. 

The 101-day paper was sold at at 13.25 percent, while the 255-day paper was sold at 14.95 percent.

According to the National Bureau of Statistics (NBS), Nigeria consumer index for November showed inflation figures marginally slowed to 15.90 percent from 15.91 percent in the previous month.