By Modupe Gbadeyanka
The stop rate of mid-tenor Open Market Operations (OMO) bills issued on Monday was slightly reduced by the Central Bank of Nigeria (CBN), Business Post reports.
The rate for the 6-month debt instrument, which was before now offered at 13.50 percent, was auctioned yesterday at 13.48 percent.
This was as the central bank noticed a huge demand for the maturity in the absence of one-year paper on offer yesterday.
The CBN continued with its aggressive sale of OMO bills at the secondary market for treasury bills on Monday.
Only two maturities were sold yesterday by the apex bank; the 94-day bill and the 192-day notes, with N100 billion worth of each tenor offered for sale.
However, while the short-dated bill was undersubscribed, the mid-dated paper was oversubscribed by investors, who turned to the note in the absence of the 12-month bill.
The CBN received and sold N70.84 billion worth of the 94-day paper at 11.90 percent, while for the 192-day bill, it received subscriptions worth N156.18 billion, selling only N113.20 billion worth of the note at 13.48 percent.
It was observed yesterday that treasury bills yields trended slightly higher on the back of the renewed OMO sale by the CBN which further compressed system liquidity levels.
“We expect the market to trade on a relatively flat note tomorrow, except for sustained demand expected on the longer end of the curve,” analysts at Zedcrest Research said.
Meanwhile, rates in the money market trended lower by two percent on Monday despite the OMO and wholesale forex intervention by the apex bank.
The moderation in rates was majorly due to the inflows from FAAC on Friday and a significant boost to Naira liquidity following heavy forex purchases by the CBN in the I&E FX window on Friday where the market turnover hit an all-time high of $1.8 billion.
The Open Buy Back (OBB) and Overnight (OVN) rates consequently ended the session at 14.00 percent and 14.92 percent respectively.
The rates are expected to remain relatively stable on Tuesday, barring a further OMO sale by the apex bank.
