CBN Allots N98bn OMO Bills to Investors Out of N3.32trn Bids
The Central Bank of Nigeria (CBN) raised N98 billion from open market operation on Friday, where the authority offered N600 billion worth of bills to banks and foreign portfolio investors.
Demand was significantly higher than the offer, reflecting the excess liquidity level in the banking system at the time and expanding offshore investors’ appetite for the naira assets.
The CBN floated Nigerian OMO bills across three maturities: 88 days, 102 days to maturity and also floated 123-day-to-maturity papers for investors’ subscriptions.
The auction was well received after weeks of inactivity, which resulted in a huge liquidity level in the financial system. The liquidity position surpassed N7 trillion last week, MarketForces Africa reported, and banks with excess cash placed funds at the CBN standing deposit facility.
The excess liquidity in the banking system prompted the CBN to float N600 billion OMO bills. Total subscriptions reached N3.32 trillion, representing a bid-to-offer ratio of 5.5x.
The 88-day paper was left untouched, while the 102-day and 123-day maturities cleared marginally higher at 20.49% and 20.61%, respectively. The conservative allotment reinforced the Bank’s preference to mop up excess liquidity without overextending issuance, according to analysts note.
The CBN sold only N98.00 billion, with stop rates of 20.49% and 20.61% on the 102-day and 123-day maturities, respectively. #CBN Allots N98bn OMO Bills to Investors Out of N3.32trn Bids
