Nigeria plans to raise 53.96 billion naira at a treasury auction on Wednesday after repaying the same amount of bills, with the aim of lowering its borrowing costs, traders said.
The debt office has said it would repay some treasury obligations in phases as they mature. It plans to repay 482 billion naira of treasury bills in the second quarter and half the amount it wants to raise between March and May.
Settlement for the bills issued on Wednesday would be on March 22, according to the auction calendar, while the amount redeemed will hit the banking system, swelling liquidity, traders told news agency Reuters.
Traders said overnight rate halved to 20 percent on Wednesday from a high of 40 percent at the opening of its previous session and could drop further as the bills are repaid.
The debt office is also selling bonds on Wednesday to raise 70 billion naira.