Interest Rate Falls as Investors Bet N2T on OMO Bills
The discount rate on Nigerian OMO bills fell to 22.98% at the primary market auction (PMA) in the just concluded week as investors parked more than N2 trillion into monetary instruments.
Foreign portfolio investors (FPIs) and some local deposit money banks staked huge funds into Nigeria’s OMO bills in the primary market auction as appetite for naira assets continue to boom.
Huge demand afforded the monetary authority an opportunity to slash spot rates on the one of the top liquidity management debt instrument, attracted FX inflows.
According to OMO bills auction result, total subscription outpaced the Central Bank of Nigeria’s (CBN) offers across standard maturities.
With booming appetite for the naira assets, foreign portfolio investors, and local banks bet N2.243 trillion on OMO bills at relatively attractive rate compared with Treasury bills sales.
The strong investment in OMO bills came just after similar experience in Treasury bill market auction on Wednesday.
At the Treasury bills auction, the market witnessed strong interest from investors, particularly on the 364-day bill, which attracted N2.53 trillion in bids; nearly five times the amount on offer.
Later, the CBN held an OMO auction for 88, 186, and 361-day tenors, resulting in long-term subscriptions of N2.243 trillion and an allotment of ₦772.93 billion, AIICO Capital Limited wrote in its market report.
Analysts said stop rate settled at 22.98%, down from 24.28% previously. #Interest Rate Falls as Investors Bet N2T on OMO Bills#
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