OMO Bill Yield Below 18% after CBN Big Auction

The average yield on open market operations (OMO) bills jerked down below 18% after large stake was received from a primary market auction conducted by the Central Bank of Nigeria (CBN) last week.

The apex bank launched large ticket OMO sales worth N1 trillion to attract foreign portfolio investors into the market. The auction was heavily subscribed with N1.06 trillion allotment made to market participants.

Meanwhile, the overnight lending rate contracted by 70 basis points to 27.5%, despite the debits for the OMO auction worth N1.06 trillion conducted on Friday, analysts said in their notes.

In the treasury bills market, investors in the secondary trades’ level increased their holdings following the benchmark interest rate hike at the CBN meeting in the past week.

Buying interest registered in the second market on Monday dragged the average yield lower by 3 basis points to 17.21% from 17.24% previously reported by MarketForces Africa.

In its market note, Cordros Capital Limited told investors via email that across the curve, the average yield declined at the short end by a basis point (1bp), mid dropped by two basis points (2bps) and long end of the curve declined by three basis points (-3bps).

The decline was driven by investors’ interest in the 80-day to maturity whose yield dropped by -2bps, yield on 171-day to maturity fell by -3bps and 339-day to maturity nosedived by 4bps bills.

Similarly, the average yield contracted by 3bps to 17.9% in the OMO segment. Also, trading activities in the FGN bond secondary market were relatively quiet.

Traders said the average yield remained at 17.1%. Across the curve, the average yield inched higher at the short (+1bp) end, following profit-taking activities on the MAR-2025 (+3bps) bond but was unchanged at the mid and long segments.

FMDQ data revealed that market rates dropped sharply despite a large OMO auction on Friday.  The open repo rate (OPR) and overnight lending rate (OVN) dropped to 26.88% and 27.49%, respectively. Naira Suffers Big, CBN Goes Ballistic Against FX Whales

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