CBN turns down 97% of N4.1trn OMO bills subscription

The Central Bank of Nigeria (CBN) turned down more than 97% of the total subscription received for its open market operation bills, according to auction results. To manage excess liquidity level in the financial system, the Apex Bank floated N600 billion worth of OMO bills for subscriptions on Monday. The authority had been absent from the market, a development that triggered a spike in financial system liquidity. Details from its Monday open market operation showed that the Nigerian OMO bills offer size was split across the short-term tenors -85 days, 99 days and 120 days to maturities.
Reflecting sustained appetite for Nigeria’s high-yield naira assets, foreign portfolio investors and local deposit money banks staked more than N4 trillion on the offer size. The CBN recorded overwhelming demand, with total subscriptions reaching N4.1 trillion. Ultimately, the apex bank allotted N998.1 billion, clearing at an average stop rate of 20.1%. In the secondary market, demand for OMO bills heated up as investors sought to boost their positions. Due to the bargain hunting, the average yield contracted by 3 bps to 20.5% in the OMO segment.