CBN Raises Spot Rate on OMO Bills to 22.48%
The Central Bank of Nigeria (CBN) increased spot rate on one year open market operation (OMO) bills to 22.48% at the primary market auction (PMA), details from auction results revealed.
The uptick at the long end reversed consecutive decline in spot rate pricing on one year tenor OMO bills instruments soo investors in the recent past auctions. The apex bank had crashed spot rate offered on the OMO bills instrument to 22.30% from as high as 25% used to attract foreign investors into the financial market.
According to auction results, the CBN offered ₦150.00 billion worth of OMO bills auction across the three tenors. At the auction, investors showed no interest in short and mid tenor bills, a development similar to past experience amidst accelerating inflation rate.
There were no bids recorded for both the short- and medium-term papers, details from auction result cited by investment firm AIICO Capital Limited revealed.
Investors staked ₦295.92 billion on the long-term paper or 363-day OMO bills, significantly higher than the amount offered across standard maturities. However, the CBN allotted ₦264.33 billion at 22.480% to market participants, 18 basis points above previous spot rate.
In the secondary market, trading activities closed bearish, with selloffs seen across tenors in the OMO segment. Consequently, the average yield on OMO bills advanced by 175 basis points to 23.5% at the secondary market. #CBN Raises Spot Rate on OMO Bills to 22.48%
