CBN Tightens Liquidity with OMO Bills Sales, Interest Rates Top 20%
The Central Bank of Nigeria (CBN) conducted an open market operation on Tuesday, offering N600 billion in OMO bills for subscription across four tenors.
The auction signals an aggressive liquidity mop-up, having raised N2.55 trillion on Monday via OMO sales to banks and foreign portfolio investors.
Its latest primary market auction details showed that the authority opened Nigerian OMO bills with 7-, 70-, 126-, and 133-day maturities, each worth N150 billion.
The OMO bills auction was oversubscribed by about N552.8 billion, while the CBN allotted N1.1 trillion across the four tenors. Stop rates on the 7-day, 70-day, 126-day, and 133-day papers settled at 21.90%, 20.79%, 20.18%, and 20.15%, respectively.
Breakdown
Total subscription recorded for 7-day OMO bills was N258.680 billion, significantly higher than the N150 billion that was offered. The CBN allotted the total bids at 21.90%.
Total subscription for 70-day OMO bills was printed at N134 billion, reflecting tight appetite compared with the N150 billion floated for sale. The CBN allotted N119 billion in 70-day OMO bills to investors at a rate of 20.79%.
Investors chased N150 billion worth of 126-day OMO bills with N94.527 billion, significantly underperforming the target. The authority approved the entire bids for the short-term instrument at 20.19%.
Nigerian OMO bills with 133 days’ maturity attracted N671.6 million in subscriptions, and the authority approved all for allotment at the rate of 20.15%, according to data obtained by MarketForces Africa.
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