By Dipo Olowookere
The Central Bank of Nigeria (CBN) on Thursday rolled out some bills to foreign investors via the Open Market Operations (OMO) on Thursday.
The exercise was conducted yesterday by the apex bank to mop up some excess cash in the financial system in the country, especially with the inflow of about N500 billion from OMO maturities during the session.
Business Post reports that OMO bills worth N350 billion were auctioned on Thursday at the secondary market, with offers valued at N340 billion received from subscribers and were eventually allotted to them.
The instruments were sold in three maturities, but only two of them caught the attention of offshore investors, who were the only ones qualified to participate in the OMO sales.
It was gathered that N20 billion worth of the 89-day bill was auctioned, N30 billion worth of the 180-day bill was offered and N300 billion worth of the 362-day bill was offered for sale by the central bank.
However, while subscriptions were received for the short and long-dated tenors, the mid-term tenor was again ignored by traders and a ‘No Sale’ result declared by the CBN.
Of the N20 billion 89-day bill auctioned, investors subscribed N2.37 billion, which was eventually allotted by the apex bank at 11.50 percent, while N337.64 billion bids were received for the one-year instrument and allotted at 13.28 percent, the same stop rate the bank sold the bill at the last exercise on Monday.
Meanwhile, at the money market, system liquidity at the interbank market opened extremely liquid, supported by OMO maturities of N500 billion entering into the system, dropping rates averagely by 0.25 percent despite the mopping up of excess liquidity in the session via the N340 billion OMO sale by the banking sector watchdog.
Consequently, the Open Buy Back (OBB) rate declined by 0.40 percent to 2.43 percent from 2.83 percent, while the Overnight (OVN) went down by 0.22 percent to 3.07 percent from 3.29 percent.
Adedapo Adesanya