By Dipo Olowookere
The Central Bank of Nigeria (CBN) conducted its weekly mopping up of excess liquidity in the financial system through the Open Market Operations (OMO) on Thursday.
At the exercise, the apex bank auctioned the OMO bills across three maturities and received bids from the respective tenor unlike in the previous session, where it only manages to sell one or two maturities.
At yesterday’s OMO sale, the bank offered N10 billion worth of the 89-day bill to offshore investors and banks. It also auctioned N20 billion worth of the 180-day bill and N270 billion worth of the 362-day bill, amounting to a total of N300 billion.
Business Post reports that while the mid and long-dated instruments were oversubscribed by market participants, the central bank received subscriptions for the exact amount it offered for sale for the short-term instrument.
An analysis of the bids showed that the apex bank received N10 billion worth of subscriptions for the 89-day bill, N44.78 billion for the 180-day instrument and N280.51 billion for the 362-day bill, resulting in a total of N299.99 billion.
For the allocation, the CBN sold N10 billion worth of the three-month bill at 11.45 percent (rate maintained at its previous level), N44.78 billion worth of the six-month bill at 11.59 percent (lower than the previous rate of 11.60 percent) and N245.21 billion worth of the 12-month bill at 13.02 billion (lower than the previous rate of 13.04 percent).
Meanwhile, at the secondary market for treasury bills, yields increased across the maturities tracked during Thursday’s session. The average yields marginally rose by 0.09 percent to 3.88 percent.
Apart from the one-month maturity, which depreciated by 0.22 percent to settle at 3.00 percent against its previous rate, 3.22 percent, yield on every other tenor appreciated yesterday.
The three-month bill rose by 0.45 percent to 3.40 percent from 2.95 percent, the six-month instrument gained 0.07 percent to close at 3.85 percent versus 3.78 percent, while the 12-month tenor appreciated by 0.06 percent to 5.26 percent from 5.20 percent.
At the money market on Thursday, inflows from maturing OMO bills of about N620 billion impacted liquidity, leaving the Open Buy Back (OBB) rate and the Overnight (OVN) rate in different directions.
While the OBB rate rose by 0.13 percent to 3.33 percent from 3.20 percent, the OVN rate reduced by 0.02 percent to 4.08 percent from 4.10 percent.
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