By Dipo Olowookere
A day after it sold some treasury bills at the primary market, the Central Bank of Nigeria (CBN) on Thursday auctioned OMO bills to investors.
At Wednesday’s PMA, the apex bank auctioned N88.9 billion worth of T-Bills in 91-day, 182-day and 364-day maturities, receiving subscriptions valued at N330.7 billion, with rates slightly cut.
The 91-day bill was trimmed to 1.79 percent from 1.80 percent, the 182-day bill was cut to 1.91 percent from 2.04 and the 364-day bill was dropped to 3.39 percent from 3.75 percent.
About 24 hours later, the CBN took to the Open Market Operations (OMO) bills worth N100 billion in an effort to manage the excess liquidity at the market space.
The investment tool was auctioned across 89-day, 194-day and 341-day tenors. Though they were all oversubscribed, the level was low when compared with the previous day’s PMA.
Of the N100 billion worth of OMO bills offered for sale by the banking industry watchdog, the market participants, who were mainly foreign portfolio investors, submitted bids valued at N177.4 billion.
Business Post reports that the central bank offered for sale N10 billion worth of the 89-day bill, another N10 billion worth of the 194-day bill and N80 billion worth of the 341-day.
When the subscriptions were analysed, investors staked N14.1 billion on the 89-day instrument, N15.3 billion on the 194-day instrument and N148.0 billion on the 341-day instrument.
For the allotment, the bank sold the exact amount it auctioned to investors with the stop rates left untouched at 4.95 percent for the three-month tenor, at 7.79 percent for the six-month maturity and at 8.99 percent for the 12-month bill.
Meanwhile, rates at the money market crashed to single-digit yesterday as anticipated as a result of the OMO and Swap maturities of about N157 billion that hit the system.
Business Post reports that the average rates depreciated by 9.15 percent to 3.15 percent. This was caused by the 9.00 percent crash in the Open Buy Back (OBB) rate and the 9.30 percent decline in the Overnight (OVN) rate.
When market activities were wrapped up, the OBB rate dropped to 2.80 percent from 15.00 percent, while the OVN rate fell to 3.60 percent from 16.00 percent.
Adedapo Adesanya