CBN Offers Investors 19.40% on 105-Day OMO Bill
The Central Bank of Nigeria (CBN) offered 19.40% interest on 105-day bills at the recent OMO bill auction, though allotment fell short of the full offering despite strong demand and substantial liquidity in the financial system.
With a goal of mopping up ₦600 billion, the Apex Bank floated OMO bill sales across three tenors—7-day, 98-day, and 105-day. The monetary action aligned with expectations that the CBN would mop up excess liquidity in the money market and refinance maturing instruments.
The financial system remained robust, with total liquidity reaching ₦5.64 trillion, a significant increase from ₦4.38 trillion the day before.
This surge is largely attributed to ₦956.20 billion in inflows from an OMO maturity, bolstered by banks’ placements in the CBN’s standing deposit facility.
In an attempt to reduce liquidity, the CBN floated an auction across three tenors. The OMO auction delivered lower-than-expected subscription levels, though demand surpassed the offer size; however, it was not comparable with the norm in the segment.
Banks and foreign portfolio investors staked ₦711.85 billion for the offered papers, indicating a sharp slowdown when compared with previous auction subscriptions.
In the end, the CBN allotted ₦235.60 billion in OMO bills exclusively for the 98-day and 105-day tenors, achieving competitive stop rates of 19.35% and 19.40%, respectively. #Naira Touched Intraday High of N1405/$ in FX Market
