The Central Bank of Nigeria (CBN) conducted a successful Open Market Operation (OMO) bill auction on April 3, 2024, resulting in the sale of N676.65 billion worth of securities.
The auction saw an impressive turnout from investors, with over N652 billion of the total amount sold at a competitive interest rate of 21 percent.
The auction, which featured various tenors, witnessed significant demand for the 363-Day bills, attracting a subscription of N1.16 trillion against a N350 billion offer.
This particular tenor cleared at a stop rate of 21.1250 percent, with the CBN selling N652.40 billion, indicating investors’ preference for higher-yielding, long-term securities.
While the 97-Day and 188-Day bills also garnered interest from investors, with subscriptions of N17 billion and N20.25 billion respectively, the sales were more conservative compared to the longer tenor bills.
The successful auction reflects the CBN’s strategic approach to managing liquidity in the banking system and stabilising financial markets amid rising interest rates. By offering competitive returns to investors, the CBN aims to align monetary policy with economic objectives, including curbing inflation and maintaining economic stability.
The high subscription for longer-term securities underscores market sentiment for higher returns amidst the prevailing economic conditions. This auction signals the CBN’s commitment to tightening monetary policy, which could have broader implications for interest rates across the financial market.
