CBN Reduces Rates on Nigerian OMO Bills, Raises N1.9trn
The Central Bank of Nigeria (CBN) cut rates on OMO bills at the primary market auction on Thursday to mop up excess liquidity in the financial system.
The second OMO auction since the authority lifted restrictions on retail investors’ participation attracted significant subscription barely 24 hours after the previous auction.
At the auction, the CBN opened N1 trillion in OMO bills for investors’ subscription across two tenors – 96 and 152 days to maturity, naira assets.
Aggregate demand from bids submitted totalled about N4.4 trillion. Reflecting sustained appetite for duration, 152-day-to-expiration OMO bills attracted a large amount.
The CBN allotted OMO bills worth about N1.9 trillion to investors across the two tenors at the spot rates of 19.85% and 19.32%.
The latest spot-rate pricing contrasts with the offering to banks and foreign portfolio investors, when retail investors were blocked from direct participation.
With an influx of additional funds from the retail segment, Apex Bank has begun to relax elevated yields on OMO papers, as seen in its Treasury bill pricing.
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