CBN to mop up N826bn from circulation

BY PETER EGWUATU

THE Central Bank of Nigeria, CBN, weekend, said it will mop up about N826.31 billion from circulation in the first quarter of 2013, through the sale of Treasury Bills, (T-Bills), just as the Debt Management Office, DMO, said it will raise N110 billion on Wednesday through the issuance of bonds with maturities ranging from between five to ten years.

According to the DMO, it will raise the funds through the issuance of N35 billion bond with five-year maturities, N30 billion bond with a seven-year maturity and a 10-year bond worth N45 billion, using the Dutch Auction System.

The  CBN said it will raise, at its twice-monthly auction, N321.29 billion, N354.93 billion and N140.09 billion in 91-day, 182-day and 364-day T-Bills in January, February and March respectively.

Treasury Bills are short term debt obligation with maturities of less than one year, issued by the Central Bank of Nigeria, CBN.

T-Bills are used by the CBN as an Open Market Operation (OMO) instrument to control the amount of money in circulation. Bonds, on the other hand, are long term debt instruments, with a minimum maturity period of one year and can be up to 30 years or 50 years.