By Dipo Olowookere
The sum of N411.14 billion was mopped up from the financial system on Thursday by the Central Bank of Nigeria (CBN) via the Open Market Operations (OMO).
Again, stop rate for the long-dated instrument was slightly reduced by the central bank as investors continue to show huge interest for the investment tool, which is used to control liquidity in the financial system.
The CBN came to the market with OMO bills for three different maturities, but only two attracted subscribers attention and were eventually issued with the third declared ‘No Sale’ by the apex bank.
Business Post reports that the banking industry regulator auctioned N20 billion worth of the 89-day bill, N30 billion worth of 180-day bill and N300 billion worth of 362-day bill.
However, when the subscriptions were analysed, N100 million was put on the short tenor, while N411.04 billion staked on the long maturity, with nothing received for the mid-tenor bill.
When allocations were made, the central bank sold N411.04 billion worth of the one-year bill at 13.25 percent in contrast to 13.26 percent at the previous session, while it allotted N100 million for the three-month instrument at 11.48 percent.
At the secondary market for treasury bills yesterday, the average yields declined by 0.21 percent to settle at 3.87 percent. It was observed that the yields further went down across tenors on the back of sustained bullish activity.
The six-month instrument recorded the biggest fall, 0.31 percent to close at 3.85 percent from 4.15 percent. Yield on the 12-month tenor declined by 0.25 percent to 4.68 percent from 4.93 percent, yield on the three-month maturity decreased by 0.18 percent to 3.54 percent from 3.73 percent, while yield on the one-month tool fell by 0.10 percent to 3.40 percent from 3.50 percent.
Meanwhile, funding pressure from the OMO sale triggered an increase in the money market rates on Thursday. The Open Buy Back (OBB) rate rose to 3.71 percent from 2.07 percent, while the Overnight (OVN) rate jumped to 4.43 percent from 2.79 percent.
