How is the Primary Auction for Treasury Bills conducted in Nigeria?
Each week, the Central Bank of Nigeria (CBN) on behalf of the Federal Government of Nigeria, offers through authorized discount houses and banks, 91, 182 Day Treasury Bills to the market. Once a month, 364-Day Treasury Bills are offered. An auction notice is placed in the newspapers specifying the amount of Treasury Bills on offer and the tenor, which can be 91, 182 or 364 days. The Bids are submitted though the authorized dealers every Wednesday by 10am and the results announced by close of business same day. Allotment and settlement is done the next day i.e. one day after bids submission. The Money Market Dealers (MMDs) acts as underwriters in that the balance of the Treasury Bills not taken up by the market is held by them for possible sale in the secondary market. The Dutch auction bidding system is used, i.e. if a bidder is successful, the bidder buys at the rate he/she has indicated on the bidding document.
Every Fortnight, the Central Bank of Nigeria (CBN) on behalf of the Federal Government of Nigeria, offers through authorized discount houses and banks, 91, 182 Day Treasury Bills to the market. Once a month, 364-Day Treasury Bills are offered. An auction notice is placed in the newspapers specifying the amount of Treasury Bills on offer and the tenor, which can be 91, 182 or 364 days. The Bids are submitted though the authorized dealers every Wednesday by 10am and the results announced by close of business same day. Allotment and settlement is done the next day i.e. one day after bids submission. The Money Market Dealers (MMDs) acts as underwriters in that the balance of the Treasury Bills not taken up by the market is held by them for possible sale in the secondary market. The Dutch auction bidding system is used, i.e. if a bidder is successful, the bidder buys at the rate he/she has indicated on the bidding document.
