Offshore Investors Snub CBN’s N100bn Short, Mid-Tenor Bills

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By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Monday announced a surprise sale of treasury bills through the Open Market Operations (OMO).

The apex bank offered the instrument in three different maturities like it did in the previous exercise, which held last Thursday and from the results, participants again snubbed the short-dated and mid-dated bills.

However, the interest was skewed around the long-dated instrument and it was again oversubscribed by offshore investors, who qualify to participate in the OMO auction, according to the new regulation.

Business Post reports that N30 billion worth of 85-day bill was offered for sale, N70 billion worth of 176-day bill and N150 billion worth of 351-day bill were auctioned during the exercise.

But when the results were announced, the central bank said it received no bid for the three-month and six-month instrument, just like in the previous OMO sale and consequently declared ‘No Sale’ for them.

However, for the 12-month OMO bill, the banking sector regulator said it received bids valued at N229.08 billion, which was N79.08 billion more than it offered.

At the close of the exercise, the apex bank allotted N229.08 billion worth of the 351-day bill to investors and the stop rate retained at 13.28 percent.

Tomorrow, the CBN will auction treasury bills worth N7.00 billion to local investors via the primary market and the stop rates are anticipated to be slightly lowered during the exercise.

According to the calendar released by the auctioneer some days ago, it would sell 91-day bills worth N2.00 billion, 182-day bills worth N2.00 billion and 364-day bills worth N3.00 billion.

Meanwhile, the money market rates marginally increased on Monday by 0.57 percent on the back of the 0.57 percent rise posted by the Open Buy Back (OBB) rate and the 0.57 percent growth printed by the Overnight (OVN) rate.

At the close of transactions, the OBB rate improved to 2.79 percent from 2.21 percent, while the OVN rate appreciated to 3.36 percent from 2.79 percent.

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