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CBN Soaks Inflows from N452b Maturing Bills via N377b OMO Sales

By Modupe Gbadeyanka

The Central Bank of Nigeria (CBN) on Thursday conducted another OMO auction to manage excess liquidity via maturities N452 billion bills.

Yesterday, the treasury bills market received inflows of N452 billion maturing bills and to soak up the excess liquidity, the offered N450 billion worth OMO bills to investors.

However, the exercise was not fully subscribed to as the apex bank could manage to raise N377.07 billion from the auction.

From the N100 billion worth of the 91-day bills, the CBN sold N27.43 billion at 11.05 percent, while it realized N349.64 billion from the N350 worth of the 203-day bills sold at 12.15 percent.

In general, the treasury bills market was bearish on Thursday as market participants factored in supply from the OMO auction and repriced the maturities on the mid-to long-end accordingly.

Yields expanded by 0.03 percent on the average across the benchmark securities.

“We expect the recent trend in the T-bills to continue tomorrow. Yields should consequently tick slightly higher on average,” Zedcrest Research said.

Meanwhile, the funding rates slightly increased yesterday with the Open Buy Back (OBB) rate closing at 8 percent from 7.75 percent, while the overnight rate rose to 8.92 percent from 8.54 percent in the previous day.

The Net System Liquidity closed N264 billion positive as the CBN OMO sold N377 billion to mop up N452 billion in maturities.

The rates are expected to remain stable in single digit territory as there are no significant funding pressures expected today.

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Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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