CBN Allots N4.4trn in OMO Bills to Investors, Rates Below 20%
- OMO bills totalling N1trn was floated, N4.4trn Raised
- CBN sells OMO bill with 84-Day Tenor at 19.14%
- OMO bills for 147-day expiration attracted an 18.49% interest rate
- Nigerian OMO bills with a 154-day tenor sold at 18.41%
- Spot rates fall below 20% across tenors
- OMO Bills totalling N3trn expired
The Central Bank of Nigeria (CBN) sold OMO bills totalling about N4.4 trillion across three tenors to investors at an open market operation conducted on Tuesday.
To mop up excess liquidity in the financial system, the Apex Bank conducted an open market operation, placing N1 trillion worth of OMO bills for investors to subscribe to.
MarketForces Africa reported that the money market opened with a credit balance of ₦4.33 trillion, down N0.33 trillion from Friday’s closing level of ₦4.66 trillion.
The offer available for subscription includes Nigerian OMO bills with maturities of 84, 147, and 154 days. The CBN floated N200 billion in 84-day OMO bills and N400 billion in 147- and 154-day OMO bills.
Total subscription at the auction was significantly higher than the amount offered for sale, reflecting sustained demand for naira assets.
According to the auction results reviewed by MarketForces Africa, total subscription came in at N6.306 trillion, with longer tenors attracting most of the inflow on Tuesday.
Against a N200 billion offer, OMO bills with an 84-day expiration worth N637.185 billion were allotted to market participants at 19.14%.
Compared with a N400 billion offer size, Nigeria OMO bills with 147-day tenors totalling N817.321 billion were allocated to investors at the spot rate of 18.49%.
The CBN sold N2.942 trillion worth of OMO bills with 154 days to expiration at 18.41% to retail and institutional investors at the auction. The amount is about 5x the offer size, and the allotment was 70% of the total subscription for the tenor.
System liquidity is expected to remain relatively comfortable in the near term, supported by the N3.00 trillion OMO repayment on Wednesday. This is expected to provide additional liquidity to the market and support stable money market conditions.
