Nigeria Sells 34.4billion Naira Treasury Bills

The Nigerian central bank auctioned treasury bills on Wednesday at higher rates. The transaction was meant to lure foreign investors hours after President Buhari told the bank to ban access to dollars for food imports. The decision is seen as a means of reducing the decline in the nations foreign reserves. The bank auctioned 34.4billion Naira worth of treasury bills, paying 12 percent for the longest tenor one-year paper, up from 11.2 percent it paid at its last sale, on ample demand for the bills, traders said. Pressure has been building on the Naira currency as oil prices drop and foreign investors book profits on local bonds in response to falling yields. Crude sales account for 90percent of foreign exchange earnings and two-thirds of government revenues in Nigeria, Africa’s top oil producer. Banking stocks fell 1.26 percent on Wednesday, to help drag the main share index to a more than two-year low as negative sentiment persisted on the stock market. Traders said the bank told them to increase their rates at the bills auction from last auction rates as the central bank tries to lure foreign inflows. Traders said the market was waiting for more information on how such a ban would be implemented, especially for importers with   Nigeria, which has Africa’s biggest economy, operates a multiple exchange rate regime, which it has used to manage pressure on the currency.