As domestic and foreign lenders’ demand for debt instruments continue to surge, the Central Bank of Nigeria (CBN) floated a second Open Market Operations (OMO) bill auction on Tuesday after raising N2.52 trillion on Monday from 141-day tenors priced at 20.10%.
The apex bank in the latest auction offered two shorter tenors – 112 and 133 -Day OMO bills worth N300 billion each for investors’ subscription.
With the new auction on Tuesday, the total auction offer totalling N600 billion attracted N2.712 trillion in subscription money from eligible market participants.
According to the data from the deal, the CBN allotted the total amount of bids submitted to reduce the excess liquidity level in the money market.
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The statistics reflected the nation’s financial system had a high credit balance of N5.5 trillion as local deposit money banks stepped up placement at the apex bank’s standing deposit facility.
A further analysis of the offer showed that OMO bills maturing on November 24 this year attracted 20.35%, while the spot rate for the short-term bills expiring on December 15 was priced at 20.25%.
The auction of the OMO bills is a further debt management strategy of the Federal Government to raise funds for budgetary obligations, particularly for capital projects, as its deficit financing gap remains wide despite improved revenues over the past years.
