CBN Sells N1.6trn OMO Bills to Investors at 21.8%
The Central Bank of Nigeria (CBN) sold N1.63 trillion in OMO bills to investors, market participants in two auctions conducted this week. The fast and furious OMO bill allotment followed two failed auction where bids were rejected.
The demand for OMO bills was supported by improved system liquidity from residual FAAC credit. At the first OMO auction, the CBN sold ₦869.46 billion, with the stop rate on the 1-year paper at 21.89%, according to investment banking firms notes.
Thereafter, the CBN sold ₦758.00 billion, with a stop rate on the 1-year paper at 21.87%. Spot rates on OMO bill has been on declining after initial sales under the current apex bank leadership.
The move was to attract FX inflows from foreign participants who seek to park funds in government borrowing instruments via primary market auction sales. The apex bank has continued to find ways to boost FX inflows into the financial markets as oil export receipts continue to disappoint.
The inflows from oil has been allegedly pledged in oil-swap deals. At the same time, the balance in gross external reserves has been covenanted in various government deals, including FX swaps and for oil-backed loans.
In July, analysts said despite some buying interest in a few bills, there were no sales at the first and second Open Market Operations (OMO) auctions. #CBN Sells N1.6 trillion OMO Bills to Investors at 21.8% Inflation Rate Increases to 4.4% in Kenya
