The Central Bank of Nigeria (CBN) has said it would mop up about N143 billion from circulation next week Thursday through treasury bills.
The apex bank said it would issue N142.97 billion in treasury bills ranging from 3-month to 1-year maturities at its regular twice-monthly auction on September 6, 2012.
The bank said it would raise N32.97 billion in 91-day notes, N50 billion in 182-day bills and N60 billion in the 264-day paper.
Nigeria issues treasury bills regularly to reduce money supply, curb inflation and help banks manage their liquidity. The CBN recently took measures aimed at reducing liquidity in the system by raising the cash reserve requirement for lenders to 12 per cent from eight per cent, and reduced net open positions to one per cent from three per cent, to curb the money supply and support the naira.
It also placed a restriction on funds that banks can use on inter-bank market, barring banks that borrow funds from its repo window from participating in foreign exchange (FOREX) auctions and lending to others on the interbank naira market.
This in turn had made the interbank rates unstable for some time and also reduced the amount of cash available to banks at the FOREX market, while the naira continued to firm up, selling at 158.10 to the dollar at the interbank market as at Tuesday.
Call rate at the interbank market rose to 13.58 per cent while 7-day money was up to 14.04 per cent. However, the longer tenured rates dropped with 30-, 60- and 90-day money dropping to 15.28, 15.87 and 16.25 per cents respectively.