CBN Allots N903bn Worth of OMO Bills, 188-D Price at 20.54%
The Central Bank of Nigeria (CBN) conducted an open market operation on Wednesday where N600 billion worth of OMO bills was floated for investors’ subscription.
With more than N5 trillion in free funds, a slew of analysts anticipated that both the midweek treasury bills and OMO auction will attract investors’ attention.
The Apex Bank action reflects the need to mop up excess liquidity level in the financial system.
The CBN offered OMO bills to eligible market participants – foreign portfolio investors and deposit money banks—across two tenors. The offer size split between OMO bills that will expire in 174 days and 188 days was significantly oversubscribed.
.At the end of the OMO auction, the CBN allotted N903.4 billion across the two bills, at stop rates of 20.45% and 20.54%, respectively. Average yields, however, closed flat at 16.95%.
Hence, Nigerian interbank rates advanced across all tenors, with the overnight rate climbing 6 bps to 24.88%, as system liquidity tightened as OMO auction absorbed excess liquidity.
MarketForces Africa reported that system liquidity improved significantly on Tuesday, rising by +40.26% to N5.47 trillion (from N3.90 trillion previously), largely supported by the N1.36 trillion in OMO repayment. First Holdco Dips Below N1.3trn Amidst Huge Trading Volume
