Details from the auction results showed that the Central Bank of Nigeria (CBN) raised the spot rate on one-year open market operation (OMO) bills to 22.48% at the primary market auction (PMA).
In the most recent auctions, investors saw a reversal of the declining spot rate price on one-year tenor OMO bills instruments due to an upswing at the long end. In an effort to draw foreign investors into the financial market, the apex bank crashed the spot rate given on the OMO bills instrument, which was previously set at 25%. The new rate is 22.30%.
The CBN presented OMO bills for auction valued ₦150.00 billion over the three tenors, according to the auction results. Investors’ lack of interest in short- and mid-tenor notes at the auction was consistent with previous experiences despite rising inflation rate.
There were no bids recorded for both the short- and medium-term papers, details from auction result cited by investment firm AIICO Capital Limited revealed.
Investors staked ₦295.92 billion on the long-term paper or 363-day OMO bills, significantly higher than the amount offered across standard maturities. However, the CBN allotted ₦264.33 billion at 22.480% to market participants, 18 basis points above previous spot rate.
In the secondary market, trading activities closed bearish, with selloffs seen across tenors in the OMO segment. Consequently, the average yield on OMO bills advanced by 175 basis points to 23.5% at the secondary market.
