OMO Bills Attracts N4.1 Trillion Subscription from Investors
Foreign portfolio investors and Nigerian deposit money banks (DMBs) staked more than N4 trillion on the Central Bank of Nigeria (CBN) open market operation (OMO) bills on Monday.
The Apex Bank returned to the market to mop up excess liquidity in the financial system. MarketForces Africa reported that the system was flooded with inflows that lifted liquidity to about N6 trillion last week.
Seeking alternative earnings sources, banks pitched their tents at the CBN standing deposit facility to earn 24.5% amidst cash reserve refunds.
The CBN conducted its first OMO bill auction on Friday, raised N98 billion out of N3.32 trillion subscription level recorded with N600 billion offer size across three tenors – 88, 102 and 123 days to maturities.
With excess rejection of 97% from total demand, the Apex Bank floated another N600 billion in OMO bills on Monday across three tenors.
OMO Bills, which is expected to expire in 85 days’worth N200 billion was positioned for subscription. Also, Nigerian OMO bills with 99 days to expiration worth N200 billion was floated.
In addition, the authority sought investors’ subscriptions for OMO bills with 120 days to maturity worth N200 billion.
These OMO market instruments attracted strong demand, with total subscriptions reaching N4.1 trillion. Ultimately, the apex bank allotted N998.1 billion, clearing at an average stop rate of 20.1%.
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