FG set to inject N350bn into economy

…CBN also sells N114.95bn in treasury bills

Amidst rising economic crisis, the Federal Government has concluded plans to inject N350 billion into the economy in other to stimulate the various sectors by April

The Minister of Finance, Kemi Adeosun disclosed this yesterday while interacting with journalists on the state of the economy after the National Economic Council retreat in Abuja.

According to the minister, the fund is expected to be sourced from 2016 appropriation. She said her ministry was already discussing with some of the contractors who would paid the said amount. “We are specifically looking at contractors who have laid-off staff and how many Nigerians are they going to put back to work as a result of this money that we are planning to release,” she added.

According to her, counterpart funding was exacerbating the indebtedness of state governments, noting that the federal government planned to reduce that requirement temporarily from 50 percent to 10 percent.

Meanwhile, Nigerian bond yields spiked across the curve today after the Central Bank unexpectedly tightened monetary policy in an about-turn to curb inflation and attract foreign investors.

ALSO SEE: FG’s revenue drops by N25bn in February

Yields on the benchmark 20-year bond rose 55 basis points (bps) to 12.7 percent while the 10-year yield climbed 45 bps to 12.65 percent. The yield on five-year paper, the most liquid maturity, gained 41 bps to 11.7 percent.

The stock market, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, bucked two day of gains to shed 1.19 percent, as domestic funds switch to bonds, traders said.

Traders estimated the new cash reserve requirement will soak up between 350 billion and 400 billion naira. The central bank is also selling 114.97 billion naira in treasury bills to further drain liquidity.