Market Liquidity Rises by 32% as CBN Turns Down OMO Bets
Money market liquidity spiked by 32% as the Central Bank of Nigeria (CBN) turned down about N1.3 trillion in OMO bills subscription at the open market operation on Tuesday.
In separate notes, Broadstreet investment firms reported that intermarket liquidity opened the day with a surplus balance of ₦4.3 trillion, an increase of 32% above the previous day’s close.
In absolute terms, AIICO Capital Limited said additional inflows of ₦1 trillion lifted liquidity balance in the financial system from previous session’ level.
This was as a result of N1.07 trillion inflows from OMO bills maturity repayment amidst easing deposit placement by deposit money banks at the standing deposit facility of the CBN.
Banks’ placement at the CBN’s SDF remains elevated at ₦3.08 trillion, representing a 3% decline on the day, according to TrustBanc Financial Group Limited.
Despite this, average funding cost rose by 2 bps to 22.63% as the Open Repo Rate (OPR) held at 22.50%, while the Overnight (O/N) spiked by 4 bps to 22.76%.
The CBN floated N600 billion in OMO bills for subscription to refinance its recent maturity. The auction was well received by banks seeking to boost earnings and foreign portfolio investors seeking elevated rates on their portfolios.
Subscription level reached N1.3 trillion at the auction, but the CBN turned down investors’ money, though analysts said the OMO bills will probably be re-floated. System liquidity is expected to remain in surplus in the near term. Oando: Undervalued Giant Poised for Comeback, Investors Await Strategic Reset
