The Federal Government on Thursday sold N110.85bn ($693.90m) in short-dated treasury bills at an auction, with yields falling sharply compared to the trend at the previous auction.The Central Bank of Nigeria sold N29.64bn of 91-day treasury bills at 13.90 per cent, down from a 15 per cent marginal rate at the previous auction.It also sold N40.68bn in 182-day paper at 15.10 per cent, against 16.20 per cent last week, while it sold N40.53bn in 364-day bills at 15.49 per cent, compared with 16.34 per cent the previous week.According to the CBN, total subscription stood at N355.88bn, compared to N241.42bn at the previous auction.The Federal Government recently sold N65bn ($409.45m) in 10-year sovereign bonds at yields 150 basis points lower than its previous auction in October.The Debt Management Office in a public notice had said that it sold N35bn of 10-year papers due to mature in 2018 and N30bn in the 10-year papers maturing in 2019, at its eleventh monthly debt auction of the year. It pointed out that all the papers were re-opening of previous issues.The debt office said, The 10-year papers were all sold at a 16.50 per cent marginal rate. The 10-year papers attracted 18 per cent marginal rate at the last months auction, reflecting the hike in CBN benchmark interest rate but rates have come down to reflect greater liquidity in the market. Market is coming back in terms of pricing as increased liquidity in the system helped boost interest in the papers.Meanwhile, the naira fell against the United States dollar at both the inter-bank market and at the bi-weekly auction on Wednesday as the CBN again failed to meet demand for the greenback.The naira closed at N159.75 to the dollar at the inter-bank market compared with Tuesdays close of N158.90 after the CBN failed to meet demand at its official window, thereby putting pressure on the local currency.At the official window, the CBN sold only $250m at N156.21 naira to the dollar, short of the $411.62m demanded. It sold $250m at N155.21 at the previous auction on Monday.The Monetary Policy Committee on Monday announced the devaluation of the naira, setting the new official exchange rate at N155 to the dollar from its previous rate of N150 and maintaining the band of plus or minus three per cent.The new exchange rate represents 3.2 per cent devaluation in the face of heightened demand for forex and the depletion of the countrys foreign reserves in an attempt to defend the value of the naira.According to the CBN Governor, Mr. Lamido Sanusi, the new exchange rate band means that the naira should float roughly within a range of N150 to N160 per dollar, unless extraordinary shocks necessitated a change in stance.
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