CBN's OMO Auction Sees N4.93 Trillion in Bids
On August 13, 2023, the Central Bank of Nigeria (CBN) conducted an Open Market Operations (OMO) auction, offering N300 billion each in 103-day and 138-day OMO bills. Investors submitted bids totaling N4.93 trillion, significantly exceeding the N600 billion on offer.
The CBN allotted N2.60 trillion, reflecting strong demand for short-term securities despite previous liquidity management efforts. The auction indicates a competitive market for attractive short-term investment opportunities, with OMO bills serving as a key liquidity management tool for the CBN.
In the preceding week, the CBN injected N5.21 trillion into the banking system, including an N2.48 trillion OMO repayment. The benchmark 364-day Treasury Bill stop rate rose to 17.59% just before the OMO auction, highlighting the significant yield difference between OMO securities and Treasury Bills.
Investors must consider factors such as tenor, liquidity, and reinvestment risk when evaluating returns.
Plus234Feed summary based on reporting from The Will. Read the original report below.
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