CBN Allots Fresh OMO Bills to Banks, Foreign Investors
Nigeria’s Central Bank (CBN) issued a huge amount of an open market operations (OMO) bills to local and foreign portfolio investors at the primary market auction conducted on Monday.
The auction was announced to redirect rates and liquidity movement in the money market on fear that N984.22 billion in inflows from maturing OMO bills on Tuesday would trigger excess cash in the banking system.
The Apex Bank opened ₦600 billion worth of OMO bills to eligible market participants—banks and foreign portfolio investors. The auction was well received ahead of fresh maturities and robust liquidity in the financial system at the beginning of the week.
Investment analysts said inflows from sales and repurchase agreements (SRAs)—an open market operation of the CBN to affect overnight rates and money supply. The inflows significantly boosted system liquidity on Friday, prompting the CBN to intervene with cash reserve ratio debits and a ₦600 billion OMO auction across mid-tenor papers today.
The auction saw robust demand, with ₦1.146 trillion in subscriptions and ₦1,127.6 billion allotted. OMO bills was offered across the 106 and 169-day tenors with a bid-to-offer ratio that settled at 1.9x. In the secondary market, the average yield contracted by 24 basis points to 26.2% in the OMO bills segment due to bargain hunting.
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