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Overnight Rate, T-Bills Yields Fall on Absence of OMO Auction

By Dipo Olowookere

For the third consecutive day, the Central Bank of Nigeria (CBN) failed to conduct its regular sale of treasury bills through the open market operations (OMO).

The last OMO auctioning by the central bank was on Thursday, November 30, 2017, and no sale was done that day despite receiving N61 billion worth of subscriptions from traders.

Since the beginning of this week, after the resumption from the public holiday observed last Friday, the apex bank has not conducted any OMO auction.

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This consequently dropped the average yields of T-bills at the market.

At the close of business on Wednesday, the yields fell to 16.81 percent after shedding 70 basis points.

If the CBN fails to resume the OMO auction exercise, the yields are expected to further go down today.

Meanwhile, the money market rates recorded another decline yesterday.

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The overnight rate, which closed on Tuesday at 16.75 percent, slightly went down to 14.83 percent at the close of business on Wednesday.

In the same vein, the open buy back (OBB) rate slumped to 13.83 percent yesterday from 16 percent recorded the previous day.

This trend is likely to continue today.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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