CBN Raises N2.3trn from Treasury, OMO Bills
Deposit Money Banks (DMBs), Foreign Portfolio Investors (FPIs), Pension Fund Administrators (PFAs), and wealth managers staked a total of N2.566 trillion on OMO and Nigerian Treasury bills at the primary market auctions this week.
Investors participated in the Apex Bank’s open market operations on Tuesday, followed by the Nigerian Treasury bills auction on Wednesday. The authority mopped up about N2.3 trillion from the two auctions.
On Tuesday, the Central Bank of Nigeria (CBN) offered N600 billion worth of OMO bills for investors’ subscription to eligible market participants—banks and foreign portfolio investors.
Subscription levels surpassed the CBN offer size that was split into N300.00 billion for OMO bills that is expected to mature in 105 days. Also, the CBN opened N300.00 billion worth of OMO bills with a 245-day maturity date.
Total subscription from the auction bids at N2.28 trillion, translating to 3.8x bid-to-offer ratio. The CBN allotted N2.12 trillion for OMO bills with 245 maturity only, at a stop rate of 23.7%.
The CBN OMO bills settlement effectively neutralised excess liquidity in the financial system, pushing interbank rates higher. Then came the midweek auction, where the authority offered N220.00 billion worth of Nigerian treasury bills across standard tenors.
The CBN offered investors N60.00 billion worth of Nigerian treasury bills with 91 days maturity and sought to sell N20.00 billion worth of 182-day and N140.00 billion worth of 364-day bills, which were made available to investors.
Reflecting still-strong appetite, total subscription levels settled at N366.55 billion, a decline from N675.66 billion recorded at the previous auction, indicating a bid-to-offer ratio of 1.7x.
The auction closed with the CBN raising N173.83 billion, below its offer size of N220 billion. The Apex Bank raised N15.33 billion from 91 days bills allotted at the rate of 15%, the same rate from the previous action.
An allotment of N18.32 billion was made by the CBN for the 182 days bills at the rate of 15.50%, the same as previous offer. Stop rates were mostly stable, except for the 364 days bills paper, which reversed its recent downward trend, rising by 62bps to 16.50%.
Investor appetite for duration stayed strong, with the one year paper recording a bid-to-cover ratio of 2.31x. In total, the CBN mopped up N2.29 trillion in the just concluded week. #CBN Raises N2.3trn from Treasury, OMO Bills#
