The Central Bank of Nigeria (CBN) has stated that it would issue N512.7 billion worth of Treasury Bills in the second quarter of 2020 (Q2).
The disclosure was made by the CBN in the Treasury Bill programme released on its website, covering the second quarter of 2020. The N512.7 billion treasury bill planned for Q2 2020 represents a drop of N361.7 billion when compared to the over N874.4 billion issued in Q1 2020.
The breakdown of the calendar shows that N94.24 billion will be raised in the 91-day maturity period, N86.18 billion for 182 days and N332.35 billion for 364 days maturity period.
Basically, the CBN sells T-bills on a bi-weekly basis to investors and is one of the safest investments available. Interests are paid upfront and the principal paid in full upon maturity.
Understanding Treasury Bills: Basically, when the government is going to the financial market to raise money, it can do it by issuing two types of debt instruments – treasury bills and government bonds.
Treasury bills are issued when the government needs money for a short period while bonds are issued when it needs debt for more than say five years. The issuance of treasury bills is also used as a mechanism to control the circulation of funds in the economy.
Treasury bills have a face value of a certain amount, which is what they are actually worth. However, they are sold for less. For example, a bill may worth N10,000, but you would buy it for N9,600. Every bill has a specified maturity date, which is when you receive the money back.