CBN Auctions OMO Bills to Non-Resident Investors at 12.75%

By Dipo Olowookere

Non-resident investors were given the opportunity to pick up the treasury bills offered by the Central Bank of Nigeria (CBN) on Thursday through the Open Market Operations (OMO) at a double-digit stop rate.

A day earlier, the apex bank auctioned federal government’s T-bills to resident investors and the rates went as low as 1.93 percent and as high as 4.00 percent.

Business Post reports that at the OMO auction on Thursday, the lowest stop rate was 11.50 percent, while the highest was 12.75 percent.

A look at yesterday’s exercise showed that the central bank auctioned the liquidity control bills in three maturities. A total of N100 billion were up for grabs.

The bank offered for sale N5 billion worth of 91-day bill, another N5 billion worth of 182-day tenor and N90 billion worth of 364-day maturity.

However, the interest thing was that unlike the previous session, the exercise received huge interests from offshore investors, who had snubbed the previous OMO sales.

Subscriptions for the investment tool reflected this. A total of N134 billion were received from investors during the exercise.

A breakdown showed that bids valued at N16 billion were received for the three-month bill, N18 billion received for the six-month maturity and N100 billion received for the one-year tenor.

However, the central allocated N16 billion for the 91-day bill at 11.50 percent, N18 billion for the 182-day bill at 11.54 percent and N100 billion for the 364-day bill at 12.75 percent.

It was observed that the N134 billion mopped up from the system yesterday were slightly enough to match OMO maturities of N136 billion, effectively leaving liquidity stable.

Only yield on the 12-month tenor grew yesterday and it rose by 0.06 percent to 3.85 percent frm 3.79 percent. Yield on the one-month maturity fell by 0.41 percent to 2.05 percent from 2.46 percent, the three-month tenor depreciated by 0.28 percent to 1.96 percent from 2.25 percent, while the six-month bill dropped 0.09 percent to 2.67 percent from 2.76 percent.