CBN Drops One-Year OMO Bill Rate to 13.04%

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Thursday auctioned Open Market Operations (OMO) bills worth N200 billion to investors as a total of N169.44 billion bills matured at the secondary market.

Business Post reports that the exercise was oversubscribed by 238 percent or N281.95 billion, with much concentration on the one-year note.

At the close of the OMO sale, the central bank allotted N293 billion worth of the debt instrument to market players.

However, the stop rates were reduced by the apex bank on the mid and long-tenor bills sold to investment, while the short-date instrument was left untouched.

It was gathered that N30 billion worth of the 91-day bill was offered yesterday with subscriptions valued at N15.04 billion received and allotted at 11.80 percent.

Of the N70 billion worth of the 182-date note, the apex bank received offers worth N79.47 billion, with N49.95 billion eventually sold at 12.98 percent.

Lastly, of the N100 billion worth of the 350-day bill auctioned, the apex bank had offers worth N381.95 billion, with N228.39 billion allotted at 13.04 percent, lower than 13.14 percent at the last exercise.

The OMO rates are expected to continue to trend downward especially on the one-year paper as demand for it continue to rise.

Meanwhile, the average money market rate jumped by 6 percent on Thursday as the OMO auction by the CBN sucked system liquidity to N117 billion from N176 billion.

Consequently, the Open Buy Back (OBB) rate rose to 16.00 percent from 10.17 percent, while the Overnight (OVN) rate appreciated to 17.25 percent from 11.17 percent.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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