CBN Raises N7trn from Six OMO Auctions, Introduces New Bills

The Central Bank of Nigeria (CBN) raised about N7 trillion from six open market operations conducted in Oct to mop up excess liquidity and attract FX inflows from offshore investors.
The Apex Bank step up its OMO actions pace with six auctions, a significant deviation from one action in Sept.
A total of N6.99 trillion worth of OMO bills were allotted to eligible investors – deposit money banks and foreign portfolio investors, up from N620.65 billion sold in Sept.
The authority decision to absorb excess liquidity that lingered in the banking system – averaging NGN3.18 trillion in October tightened money market rates.
At the month end OMO auction, the CBN introduced short dated OMO bills with 46-day and 60-day maturities. “We believe that this points less to conventional investment issuance and more to deliberate liquidity management.
“Given the still-elevated liquidity levels, we believe the CBN will likely maintain this tempo, issuing short-tenor bills periodically as conditions demand.
“These issuances will serve a dual purpose, absorbing excess cash from the banking system while simultaneously drawing in foreign portfolio participation through attractive yields.
“We believe this will continue to provide an additional channel for FX inflows while helping to moderate Naira liquidity in the system,” Meristem Securities Limited said in a note. #CBN Raises N7trn from Six OMO Auctions, Introduces New Bills Aso Savings Gains 106% Since Mortgage Institution Returns to Market