Banks’ Lodgements at CBN Facility Dip after OMO Auctions
Deposit money banks (DMBs) placement at the Central Bank of Nigeria (CBN) Standing Deposit Facility (SDF) window dropped by 14% after open market operations.
The Apex Bank mopped up about N3.3 trillion from the financial system via two OMO bill auctions that recorded significant subscriptions.
Against N2.71 trillion inflow from matured OMO bills, the CBN, in a countermove, sterilised about N3.30 trillion across both operations, underscoring the persistence of its liquidity-tightening measures.
On Monday, the liquidity position in the money market moderated by 13.18% to NGN4.92 trillion, as banks’ lodgments at the CBN declined after cash-exhausting auctions bets.
The market reported a 14.84% reduction in the standing deposit facility, which settled at NGN4.64 trillion from NGN5.44 trillion.
At the close of the trading session, money market rates tightened, with the Overnight (OVN) rate increasing by 2bps to 22.21%, while the Open Repo (OPR) rate stood at 22.00%.
At the first auction last week, N600 billion worth of OMO bills were offered across the 8-day and 134-day tenors. Investor appetite was notably strong, with total subscriptions reaching N1.71 trillion, a bid-to-offer ratio of 2.9x, and total allotments of N1.70 trillion.
Stop rates cleared at 21.90% and 19.97% on the respective tenors. The Bank effectively met demand on the shorter end, fully allotting N1.07 trillion on the 8-day. Similarly, at the Thursday auction, the CBN offered N600 billion across the 33-day, 75-day and 96-day tenors.
Demand remained robust, with total subscriptions of N1.64 trillion and allotments of N1.60 trillion, with stop rates settling at 21.57%, 20.63% and 20.45% respectively.
Coronation Merchant Bank reported that the CBN sterilised about N3.30trn across both operations, underscoring the persistence of its liquidity tightening measures. Naira Dives Across FX Markets, Exchange Rates Gap Narrows
