CBN Rakes N500b from OMO Auction Amid Cut in Stop Rates

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By Dipo Olowookere

On Thursday, April 12, 2018, the Central Bank of Nigeria (CBN) auctioned some treasury bills via the Open Market Operations (OMO).

The apex bank offered bills worth N500 billion to investors during the exercise and sold the same amount of the instrument despite receiving subscriptions worth N965.26 billion from them.

It was observed that investors were more attracted to the longer tenor bill than the shorter tenor instrument offered yesterday.

From the N100 billion worth of 112-day bill offered to traders, the CBN raised a meagre N1.29 billion at 12.20 percent.

However, the apex bank received N963.97 billion worth of subscriptions from investors for the N400 billion worth of the 245-day bill offered. Eventually, the apex bank sold N498.71 billion of the instrument to market players at 13.90 percent.

According to analysts at Zedcrest Research, the treasury bills market was traded with mixed sentiments as investors took profit on some short tenured bills to fund for their bids at the OMO auction.

However, the investment research firm expects the market to remain bullish on Friday as market players look to cover for their lost auction bids.

Meanwhile, the money market rates slightly appreciated yesterday with the overnight rate growing to 3.83 percent from 3 percent in the previous session.

Also, the open buy back (OBB) rate closed at 3 percent on Thursday from 2.67 percent recorded on Thursday.

The marginal rise in the rates was mainly due to the N500 billion outflows for Thursday’s OMO auction sales.

The rates are expected to inch slightly higher today due to anticipated funding for retail FX bids by banks.

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