CBN Sells N1.3trn in OMO Bills to Mop Up Excess Liquidity
The Central Bank of Nigeria (CBN) came to the market on Monday to sell OMO bills as part of efforts to reduce excess liquidity in the money market.
The monetary authority floated N600 billion worth of OMO bills across two short-term tenors at a time when excess liquidity in the financial system was more than N4 trillion.
The authority floated OMO bill with 24 February and 26 May expiration with N300 billion offer size for each. Total subscription was robust at N2.0 trillion; however, N1.3 trillion was sold at stop rates of 22.39% and 19.48%, respectively, for the 24-Feb and 26-May papers.
Nigerian Interbank Offered Rates closed mixed on Monday, with the overnight rate falling 4bps to 22.78%, indicating tighter system liquidity despite OMO auction.
Money market financing costs displayed mixed movements, with the Overnight rate climbing 1bp to 22.79%, while the Open Repo rate held steady at 22.50%.
In the Treasury Bills segment, secondary market yields showed varied performance, with the 3-month, 6-month, and 12-month tenors edging up by 16bps, 23bps, and 2bps, respectively.
In contrast, the 1-month maturity decreased 6bps. The overall Nigerian Treasury Bills average yield closed bullish, declining 2bps to 17.53%, reflecting positive investor sentiment and a more supportive climate in the secondary market. Inflation Rate to Rise by 3.5% in January – AIICO Capital
