Offshore Investors Get CBN’s One-Year OMO Bills at 5.90%

By Dipo Olowookere

Last Thursday, the Central Bank of Nigeria (CBN) conducted an Open Market Operations (OMO) for the sale of liquidity management tools worth N60 billion.

The exercise gave the apex bank the opportunity to sell the financial assets to offshore investors to boost the nation’s external reserves.

During the OMO sale, the bank auctioned the bills in three different maturities; 89-day, 173-day and 362-day.

Business Post reports that N10 billion worth of the three-month instrument was auctioned by the CBN, another N10 billion worth of the six-month bill was auctioned, while N40 billion worth of the one-year tenor was offered for sale to investors.

But for the subscription, the apex bank received N29.0 billion for the short-term bill, N34.4 billion for the mid-term bill and N218.8 billion for the long-term bill.

However, the central bank sold the exact amount of the OMO bills it brought to the market; N10 billion for the 89-day bill, N10 billion for the 173-day bill and N40 billion for the 362-day bill.

For the stop rates, the CBN sold the three-month instrument at 1.61 per cent, the six-month tenor cleared at 4.45 per cent, while the 12-month maturity cleared at 5.90 per cent.

The central bank had usually sold the OMO bills at rates higher than the treasury bills and the main reason is to attract foreign investors, who are the main target of the OMO bills.