CBN Offers Investors 23.70% on 245-Day OMO Bill, Raises N2.12tn
The Central Bank of Nigeria (CBN) offered 23.70% as the spot rate on OMO bills maturing in 245 days to investors and raised N2.12 trillion as part of an efforts to mop up excess liquidity in the financial system.
On Tuesday, the CBN conducted an open market operation where bills worth N600 billion were floated for subscriptions. The OMO bills floated at the primary market auction conducted on Tuesday were split across the 105-day and 245-day maturities.
The authority received significant bids from deposit money banks actively playing at the fixed interest securities market to drive earnings growth and foreign portfolio investors seeking higher yields.
Details from the auction results revealed that investors’ subscription reached N2.2 trillion for the two tenors, reflecting sustained appetite from investors. But demand was heavily concentrated in the 245-day tenor, which attracted subscriptions worth N2.12 trillion.
Meanwhile, no bids were accepted for the 105-day maturity. Ultimately, the entire offer was allotted on the 245-day bill, clearing at 23.70% to eligible market participants. In the absence of FX intervention, the CBN has continued to boost FX liquidity via open market operations with dollar inflows from foreign portfolio investors.
Among all the fixed income securities, rates on OMO bills remained elevated to keep foreign investors in the economy, though the CBN has reduced returns on Treasury bill papers sharply.
MarketForces Africa reported that the Nigerian forex market experienced declining FX inflows at the official window last week. FX inflows fell US$791.10 million from US$979.10 million the previous week.
Foreign portfolio investors remained the largest international contributors with US$60.90 million, while other international sources accounted for just 0.76%. On the domestic side, non-bank corporates almost tripled their share to US$483.60 million, and exporters/importers nearly doubled their contributions to US$168.60 million.
Inflows from the CBN and individuals stood at US$68.40 million and US$3.50 million, respectively. #CBN Offers Investors 23.70% on 245-Day OMO Bill, Raises N2.12tn Naira Gains as Nigeria’s External Reserves Hit 6-Month High
