By Dipo Olowookere
The Central Bank of Nigeria (CBN) surprised the market on Thursday when it announced a ‘No Sale’ at the end of the sale of treasury bills via Open Market Operations (OMO).
Earlier in the day, the apex bank floated the OMO exercise and offered the liquidity management bills valued at N70 billion for sale.
The exercise went smoothly, with the investment tool oversubscribed by local banks and non-resident investors, who were qualified to partake in it.
However, things took a twist when the central bank decided not to allot the bills to subscribers, instead, it went away with the papers.
Business Post gathered that the bills were auctioned by the banking industry watchdog across three maturities; 89-day, 194-day and 348-day.
They were offered for sale during the session to mop maturities of about N209 billion which hit the financial system on Thursday.
The CBN auctioned N10 billion worth of the three-month instrument, another N10 billion worth of the six-month maturity and N50 billion worth of the 12-month tenor.
However, subscribers staked N20.50 billion on the 89-day bill, N17 billion on the 194-day bill and N306.67 billion on the 364-day bill.
This indicated that for the N70 billion OMO bills taken to the market yesterday by the central bank, investors offered N344.17 billion.
From what was scooped from traders, the apex bank may have refused to sell the bills because of the rates market participants requested for.
At the previous session, when the CBN sold T-bills at the primary market, it slightly increased the stop rates of the three-month and six-month bills from 1.85 percent to 2.50 percent and 2.50 percent to 2.85 percent respectively, but left rate for the one-year tenor at 3.84 percent.
At the last OMO exercise carried out by the central bank about two weeks ago, the one-year bill was sold at 12.64 percent. But yesterday, it was gathered that investors were asking for more, which the CBN was not ready to offer.
Adedapo Adesanya