GBOLABO AFUWAPE
The Central Bank of Nigeria (CBN) is scheduled to hold the first Treasury Bills (T-Bills) Primary Market Auction (PMA) for 2019 on the 16th of January 2019.
During the auction, T-Bills worth NGN225.45billion will mature, and an amount of NGN225.45billion will be issued in 91-day, 182-day and 364-day instruments.
The CBN is expected to auction NGN5.85billion, NGN26.60billion and NGN193.00billion in the 91-day, 182-day, and 364-day instruments respectively.
T-Bills are short-term debt instruments issued by a national government through the Central Bank to provide short term funding for the government. In addition to the above, central banks also use T-Bills to control money supply in the economy.
Unlike other government investment instruments such as Federal Government of Nigeria (FGN) Bonds which are long term in nature, T-Bills are relatively more liquid instruments that can be easily sold off and converted to cash if need be.
Because they are debt instruments used by the government, there is zero- risk involved in this type of investment. T-Bills are usually issued for the tenure (duration) of 91days, 182days or 364 days.
After the expiration of the tenor, your investment matures. The interest rate is also known as bid rate is not fixed but fluctuates based on demand and amount offered by the apex bank.
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