Nigeria: DMO, CBN to Restructure N825 Bn Treasury Bills Stock

24 March 2004

The Debt Management Office (DMO) in apparent bid to ensure efficient management of the nation's debt stock is set to restructure the existing stock of treasury bills valued at N825 billion or 60 per cent of the total N1.33 trillion outstanding domestic debt. Director General of DMO, Dr. Mansur Mukhtar disclosed this Thursday in Lagos, stating that part of the work plan of DMO in year 2004 is to collaborate with the Central Bank of Nigeria (CBN) to restructure the existing stock of 91-day treasury bills with a view to lengthening the maturity profile of the existing N825 billion treasury bill debt stock as well as eliminate or reduce the wide divergences in the weekly maturing volumes of the outstanding Nigeria Treasury Bill (NTB) debt.

According to him " N825 billion or 60 per cent of the total N1.33 trillion outstanding debt is in the form of 91 day treasuring bill . This is a very high number and exposes the government to high interest rate and rollover risks. This is further amplified by the "bunching problem", whereby, there are wide divergences in the weekly amounts of maturing NTBs, which tends to heighten short-term interest rate volatility". To address this problem the DMO, disclosed that he is collaborating with CBN to implement a long term restructuring exercise to lengthen the maturity structure of the outstanding treasury bill debt portfolio, and complement the existing 91-day treasury bill market , with six months and 12 months bills, adding that this will be implemented by offering for rollover, pre-determined proportions of 91 days treasury bills, into six month and 12 month treasury bills which will be offered to the market in a phased manner on the same existing CBN public auction platform for NTBs.

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