The Central Bank of Nigeria (CBN) is conducting an Open Market Open auction today with the aim of selling N1.5 trillion to investors even as the liquidity in the banking system has surged above N5.9 trillion, representing the third OMO auction offered by the apex bank between November 3 and now.
The auction, shared equally into N500 billion each across three tenors of 154-day, 252-day, and N329-day maturities, is coming in addition to estimated inflows of N2.448 trillion expected to enter the banking system this week.
The FMDA weekly market report published on Monday showed that the banking-system liquidity had increased by 15.36% week-on-week to N8.505 trillion as at close of trading on Friday, up from N7.373 trillion the preceding week.
The FMDA projected total liquidity inflows of N2.448 trillion this week, representing a decline of approximately N162 billion, or 6.21%, from N2.610 trillion in the preceding week.
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But then, despite the reduction in the expected debt instrument inflows, banking-system liquidity remained high, with substantial OMO maturities scheduled during the period.
According to the FMDA data, OMO maturities are projected at N2.298 trillion, up 13.99% from N2.016 trillion last week, representing about 93.9% of total expected inflows.
Similarly, the Federal Government Treasury Bills (FGN TBs) maturities are anticipated to decline by 73.89% to N148.565 billion just as corporate bond coupon payments are projected to also dip by 86.75% to N1.707 billion.
Based on the report, no inflows are expected from commercial paper maturities, FGN bond coupons, FGN bond maturities or Federation Account Allocation Committee distributions.
The apex bank’s financial data also reflected that deposit money banks (DMBs) had N5.915 trillion deposited at the CBN’s Standing Deposit Facility (SDF) on Monday, from N8.311 trillion on November 6 following OMO settlements.
The CBN had raised approximately N5.667 trillion through OMO auctions held on November 3 and November 6, representing about 91.7% of the N6.182 trillion allotted in October.
Meanwhile, the Debt Management Office (DMO) is scheduled to offer N800 billion Treasury Bills on Wednesday comprising N100 billion each in 91-day and 182-day bills and N600 billion in 364-day bills, and the auction is expected to settle on November 12, when N148.565 billion in Treasury Bills maturities are due.
