Bids Top N2.3trn at CBN OMO Auction, Only ₦245bn Allotted
The Central Bank of Nigeria (CBN) allotted about N245 billion in OMO bills to investors across two short tenors at the open market operation conducted to mop up excess liquidity.
The financial system was flooded with about N9 trillion in surplus cash, including more than N2 trillion from OMO bills that expired earlier in the week.
Without immediately refinancing the inflows from matured OMO bills, the market saw additional inflows from primary market repayments. This kept money market liquidity and raised the risk of too much cash in the financial system.
As part of its liquidity management efforts, the CBN floated its last auction in Oct, offering to sell N1 trillion in OMO bills across the 124-day and 138-day maturities.
Investment firm CardinalStone Securities Limited told investors in its update that the auction was oversubscribed, attracting about N2.3 trillion in total subscriptions.
However, the CBN allotted N42.2 billion to the 124-day bill and N202.7 trillion to the 138-day bill. Stop rates on the 124-day bill and 138-day bill were 17.69% and 17.63%, respectively.
The Nigerian money market closed Thursday’s session mixed, as the overnight Nigerian Interabank Offered Rate (NIBOR) rose 10bps to 20.35%, signalling a slight tightening in banking system liquidity.
Settlement of midweek Treasury bills allotted to investors at the primary market auction drove the tightening. Short-term funding rates also moved divergently, with the Overnight (O/N) rate up 3bps to 20.38%, while the Open Repo (OPR) rate held steady at 20.00%.
Investors Lock-in Yields Ahead of CBN Treasury Bills Auction
