FG to raise N80bn in 2020, 2024 bonds

FG to raise N80bn in 2020, 2024 bonds

Federal Government plans to issue N80 billion worth of local currency denominated bond with maturities ranging between 5-year and 10-year on October.
Data obtained from the Debt Management Office, DMO, indicated that government will issue N40 billion each in the debt maturing in 2020 and 2024 respectively at yields to be determined through Dutch Auction System, DAS.
All the bonds are re-openings of previous issues and results for the auction are expected the following day.
Meanwhile, overnight lending rate fell to record low two per cent yesterday, as the Central Bank of Nigeria, CBN refunded excess withdrawals from lenders before it loosened monetary policy last month to spur credit growth, traders said.
The regulator has been injecting cash into the banking system in a bid to ease liquidity and stave off recession in the country, which has suffered as oil prices fell.
It cut cash reserve requirements for lenders to 25 per cent from 31 per cent two weeks ago and left interest rates on hold at 13 per cent.
Liquidity had dried up as authorities ordered banks to move government deposits into a single account at the CBN, part of an anti-graft drive. “We expect rates to remain low until central bank issues new bills,” one dealer said.
The overnight lending rate has hovered around a threemonth low of three per cent since last week after the CBN repaid matured open market bills and did not issue fresh ones to mop up funds, in a bid to keep borrowing costs low.
Banking system credit opened at N355 billion before the inflow hit the system, lifting the sector’s total cash balance with the central bank to N1.1 trillion, traders said.
Before this, deposited money banks had lowered their loan growth guidance for this year, citing rising regulatory and economic uncertainty and a weaker output growth.
Economic growth dropped to 2.35 per cent in the second quarter from 6.54 per cent a year earlier.

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