CBN to Sell N300 Billion OMO Bills to Investors

Analysts have predicted that there will be further uptick in spot rates as the Central Bank of Nigeria (CBN) is set to raise N300 billion from OMO auction across standard maturities.

The rates adjustment expectation followed recent benchmark interest rate hike by the monetary authority to combat Nigeria’s double digit high inflation.

In anticipation, the treasury bills market had mixed sentiments but settled on a bearish note, investment banking firms said in their separate report.

 There was some demand for the 1-year paper at the early session, with most trades executed at around 19.00%-19.30%, said AIICO Capital Limited in a note obtained by MarketForces Africa.

Investment analysts however noted that the market turned bearish overall following CBN’s announcement of an OMO auction scheduled for Friday.

As a result, the average mid-rate for the benchmark NTB papers settled at 21.14% while AIICO Capital analysts anticipate the mixed to bearish sentiment will persist at the end of trading session this week.

The OMO auction is also expected to tighten liquidity balance in the financial system. Opening system liquidity plunged into negative territory, with over ₦1 trillion borrowed from the CBN’s SLF window.

As a result, the Open Repo Rate (OPR) and the Overnight Rate (O/N) increased by 13 bps and 15 bps to 32.03% and 32.40%, respectively. #CBN to Sell N300 Billion OMO Bills to Investors

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