*External reserve falls to $30.8
In an apparent bid to maintain the tight money supply and high interest rate regime in the country, the Central Bank of Nigeria (CBN) is set to mop up N2.17 trillion from the economy through sales of government securities.
This represents 170 percent increase when compared with the N1.2 trillion withdrew from the economy through the sales of government securities from December 12th to the first week of this month.
This emerged from the government securities (treasury bills) issue programme for the second quarter of the year released by the apex bank on Friday.
The programme, which would run from March 19th to June 4th, revealed that the CBN would sell N945.51 billion worth of secondary market (open market operation) treasury bills and N995.49 billion worth of newly issued (primary market) treasury bills.
Further analysis show that the apex bank would sell N215.02 billion worth of OMO bills and N265 billion worth of primary market bills from March 19th to March 26th. In April the CBN plans to sell N353.09 billion worth OMO bills and N353.09 worth of primary market bills. Also in April, the CBN would sell N261.55 billion worth of OMO bills and N261.55 billion worth of primary marker bills. On June 4th the CBN would sell N115.85 billion worth of OMO bills and N115.85 billion worth of primary market bills.
While the huge treasury bills sale would allow the CBN maintain curtail the amount of money in the banking system, hence reducing the supply of money available for lending in the economy, thus aggravating the high interest rate regime in the country.
But the high interest rate occasioned by the liquidity mop up however presents opportunities for depositors and investors to enjoy high interest earning.
Meanwhile the declining fortunes of the nation’s external reserve persisted last week, as it fell by $590 million to $30.87 billion, the lowest in more than five years. The reserve has fallen by $3.62 billion this year, due to increased dollar sales by the CBN in its effort to defend the naira.
