CBN Sells Additional OMO Bills to Investors at 26.49%
The Central Bank of Nigeria (CBN) conducted another open market operation on Wednesday and offered N300 billion in OMO bills that will mature in 83 days for subscription.
After a successful outing on Tuesday, the CBN floated another single-tenor OMO bill for subscription at the primary market. Foreign portfolio investors and local banks played actively again at the auction, which saw about a threefold subscription against the offer size.
Details from the auction results revealed that aggregate demand was robust, as reflected in a bid-to-offer ratio of 2.9x. Investment bankers said aggregate subscriptions reached ₦860 billion.
Eventually, the CBN allotted N842.5 billion worth of OMO bills to foreign portfolio investors and local deposit money banks at a stop rate of 26.49%, slightly below the previous 26.499%.
The monetary authority has been offering juicy spot rates on OMO bills sold to eligible investors to keep dollars flowing from foreign portfolio investors and make Nigeria a place for hot money.
The market anticipates the shift in rates pricing to persist as the authority looks to boost US dollar liquidity from offshore participation in the economy, given a tight FX liquidity conditions signal from the currency market this week.
In the secondary market, the Nigerian Treasury bills saw mixed sentiment with activity concentrated on select papers. Demand focused on the 23-Dec and 17-Feb OMO bills, while the 05-Mar and 20-Aug Treasury bill papers saw offers. The average rate fell 10 bps day-on-day as demand heated up.
The benchmark Nigerian Treasury bills midrate closed at 17.27%, according to AIICO Capital Limited in an investor note. #CBN Selectively Hikes Interest Rates on Nigerian Treasury Bills
