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Treasury Bills: CBN Issues N821.7 billion For Q3 2020


The Central Bank of Nigeria (CBN) published its treasury bills program for Q3 2020. The treasury bill program categorically states that part of the plans of the Central Bank of Nigeria (CBN) is to raise about N821.7 billion cash during their bill auction.

See Also: Accessing CBN HealthCare Research Development Grant

The treasury bill issue program for Q3 2020 was published on the official website of the Central Bank of Nigeria (CBN). The N821.7 billion program is an increase from the previously issued bill of N512.7 billion in Q2 2020. 

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However, putting this in perspective and breaking it down for the various maturity terms, it means that N109.6 billion will be raised in a 91-day maturity period. The sum of N149.4 billion will be raised for a 182-day maturity period, while N562.7 will be raised for a 365-day maturity period.

See Also: How to access CBN COVID-19 Relief Fund for businesses 

What Are Treasury Bills?

Treasury Bills (T-Bills) are a short-term financial instrument that is issued by the Central Bank of Nigeria (CBN) with maturity periods ranging from a few days up to 365 days (one year). Apart from the Central Bank of Nigeria (CBN) using it to finance expenditure, CBN also uses treasury bills to mop-up money supply in the economy.

Selling Of T-Bills

Treasury bill auctions are public auctions held bi-weekly by the Central Bank of Nigeria. CBN sells these T-bills on a bi-weekly basis to investors and they are considered among the safest investments since they are backed by the full faith and credit of the Nigerian Government.

Basically, it is lending money to the government, which pays full interest upfront. The principal is paid upon maturity of the investment. The government basically uses the money to fund its debt and pay ongoing expenses, salaries, etc.

See Also: 100 Profitable business ideas to start now for aspiring entrepreneurs and investors.

What Is The Bid Rate?

The bid rate otherwise called your stop rate is the interest rate that you have indicated to receive for the principal you investing in the T-Bills.

Also, the difference between the face value of the T-bill and the amount that an investor pays is called the discount rate. This is calculated in percentage.

How To Purchase Treasury Bills

In a non-competitive bid, an investor will agree to accept the discount rate determined at auction. The yield that an investor receives is equal to the average auction price for T-bills sold at auction. Individual investors prefer this method since they are guaranteed to receive the full amount. This bill is received at the expiration of the maturity period. Purchase payments must be made either through a bank or a broker.

However, in a competitive bidding auction, investors buy T-bills at a specific discount rate which they are willing to accept. Every submitted bid states the lowest rate or discount margin that the bidder/investor is willing to accept. Bids accepting the lowest discount rate are accepted first. If there are not enough bids at that level to make the issue fully subscribed, then bids at the next lowest rate are accepted. The process continues until the entire issue has been sold. Purchase payments must be made either through a bank or a broker.

Meanwhile, the treasury bills can be purchased from the secondary market if your bid is rejected. The purchase is done Over The Counter (OTC) where buyers and sellers of T-bills trade.


  • Entrepreneurs and investors can avail themselves of the opportunity of investing their cash in treasury bills especially in an economy that looms uncertainty. 
  • Apart from the interest rate, treasury bills are good sources of income stream. 
  • They are a good investment outlet for your free and disposable cash.
  • T-Bills can as well serve as a means of investment for short term savers.
  • They are tax-free.
  • Treasury bills can serve as collateral for any financial institution. 
  • Treasury Bills are very liquid and can be converted to cash quickly.
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