The Central Bank of Nigeria (CBN) has successfully allotted N756.74 billion worth of Open Market Operation (OMO) bills to approved market participants—comprising both foreign investors and local financial institutions—at relatively elevated spot interest rates.
According to MarketForces Africa, the apex bank initially offered N500 billion in OMO instruments during the auction held on Tuesday, marking its third issuance in less than a fortnight.
Despite a noticeable decline in investor appetite compared to previous April offerings, the CBN’s auction drew strong demand. AIICO Capital Limited disclosed in a market note that total subscriptions amounted to N773.74 billion, with N756.74 billion ultimately allotted.
Although the sizable issuance exerted a liquidity-draining effect on the system, interbank rates remained steady at 26.5%, buffered by an inflow of N239.15 billion from maturing OMO instruments. Meanwhile, the secondary market for Treasury bills experienced bearish sentiment, especially in relation to Mar/Apr-dated OMO securities, following the announcement of the auction.
Ahead of the fresh issuance, some investors attempted to exit their positions, although buyer interest remained largely subdued. As of the close of the auction, the spot yield on the 315-day OMO bill stood at 22.65%, while the 329-day tenor was priced at 22.72%.
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