The first Open Market Operations (OMO) bills auctions for 2024 have recorded mixed subscriptions with the 363-day bills recording N157 billion.
However, the 97-day and the 181-day bills were not as attractive to investors, thereby leading to their under-subscription by N53 billion and N39.8 billion respectively.
Although N300 billion in OMO bills were made available by the monetary authorities for auction, the total subscriptions totalled N414.2 billion and the overall sales stood at N357.2 billion.
An analysis of the 97-day OMO bills showed that the N75 billion offered recorded a subscription of N22 billion with bids fluctuated between 9% and 10.5%, thereby resulting in a stop rate of 10.5%. The total sales for the bill amounted to N22 billion.
Also, an offering of N75 billion was extended for the 181-day bills, attracting a subscription of N35.2 billion. The bids ranged from 10% to 14%, culminating in a stop rate of 14% while the total sales stood at N35.2 billion.
On the 363-day bills, an offering of N150 billion recorded a subscription of N357 billion. However, only N300 billion worth of the bills was sold. The bids varied between 11.98% and 17.75%, with the stop rate settling at 17.75%.
Over the years, the Central Bank of Nigeria (CBN) has been using the OMO bills to raise funds for public finance as short-term loans needed for bridging the revenue-expenditure gaps in yearly budgets.
After the December 2022 auction, the apex bank suspended the sale of the OMO bills but resumed the offer in August 2023, with the 362-day bills issued at a rate of 14.49%.
In November 2023, the 342-day bills recorded a yield rate of 17.98%.
While the OMO bills are both issued and owed by the Central Bank of Nigeria (CBN), the Treasury bills are owed by the Federal Government but issued by the apex bank on behalf of the government to bridge budget deficits.
