CBN Mops Up Liquidity with N1.27trn OMO Bills Sales
The Central Bank of Nigeria (CBN) allotted OMO bills totaling N1.27 trillion to investors, according to details of its open market operation on Tuesday.
The CBN decision to offer OMO bills for subscription was to stem rising excess liquidity level in the financial system. The market anticipates N594 billion in OMO bills repayment during the week.
With a move to balance money market equation, the Apex Bank floated N600 billion OMO bills for investors’ subscription amidst excess liquidity level in the financial system.
With huge appetite for the naira asset, the auction was significantly oversubscribed by banks and foreign portfolio investors.
The offer was split into 168 days and 210 days to maturities, bucket size for each investment securities was N300 billion each.
Total bids amounting to N1.34 trillion. Ultimately, N1.27 trillion was allotted, with stop rates settling at 19.35% and 19.41%, respectively.
Market liquidity opened the day with a surplus balance of ₦5.15 trillion, representing a significant increase of ₦1.12 trillion from the previous day.
This improvement was buoyed by increase in Deposit Money Banks (DMBs) placement in CBN’s Standing Deposit Facility (SDF) window to ₦4.37 trillion, alongside ₦594 billion OMO repayment.
Consequently, average funding cost eased by 2bps to 22.63% as the Open Repo Rate (OPR) held steady at 22.50%, while the Overnight rate (O/N) declined 4bps to 22.75%.
The Nigerian Treasury bills secondary market traded on a largely calm to slightly positive note, with subdued activity across most tenors.
Trading remained predominantly flat, as yields on the majority of short- to mid-dated bills closed unchanged, reflecting cautious investor participation and limited risk appetite.
However, selective movements were observed at the longer end of the curve. However, 19- Nov-26 bill saw mild sell pressure as rate rose sharply to 16.70% (+21bps). At the end, average benchmark rate declined by 5bps to close at 16.19%. #CBN Mops Up Liquidity with N1.27trn OMO Bills Sales#
