CBN Sells more T-Bills after Bond auction disappoints

Nigeria's central bank sold more treasury bills than it offered at an auction this week, it said on Friday, to mop up liquidity after the debt office cut the size of a domestic bond sale in view of its high borrowing costs.

The central bank raised 147.48 billion naira ($484 mln) at a treasury bill sale on Wednesday, higher than the 83.24 billion naira it originally advertised, and yields remained unchanged at the auction.

It sold three-month paper at 14 percent to raise 39 billion naira and offered 17.50 percent for six-month bills which fetched 23.02 billion naira. It paid 18.68 percent for the one-year bill worth 85.46 billion naira.

On Wednesday, the debt office sold far less in bonds than it had offered as investors, worried about rising inflation in Africa's largest economy, demanded higher yields from a government that is looking to spend its way out of recession.

Total subscriptions at the treasury bill auction stood at 185.97 billion naira, up from 156.56 billion naira at the previous sale last month, data from the central bank showed.

Nigeria's central bank issues treasury bills regularly to help lenders manage their liquidity, curb rising inflation and provide naira to support the government fund its budget.