CBN Hikes Interest Rates as OMO Bills Demand Slows
The Central Bank of Nigeria (CBN) hiked the interest rates on mid-tenor open market operation (OMO) bills floated at the primary market auction (PMA) on Wednesday – a reaction to a moderate surge in financial system liquidity.
The CBN floated another OMO auction, offering ₦600 billion across 104-day and 139-day tenors. This marked the second market operation of the week, with the same offer size.
The OMO bills offered to banks and foreign portfolio investors, who were the eligible market participants, were a move to absorb excess liquidity in the financial system. The money market recorded an inflow of N988.22 billion from matured OMO bills on Tuesday, a day after the first auction was conducted by the CBN.
On Wednesday, the authority received ₦687.13 billion as total subscriptions, while ₦482.33 billion was allotted to eligible investors who participated in the auction. Commenting, some market analysts attribute the lower performance to increased investor demand for yield repricing in the financial markets.
Spot rate on OMO bills with 104 days’ maturity surge to 23.60%, up by a basis point from 23.59%. Also, the spot rate for 139-day maturity OMO bills increased to 24.98%, up from 24.50% at the previous auction. #CBN Hikes Interest Rates as OMO Bills Demand Slows Tinubu Seeks Senate Approval of 2025-2026 External Borrowing Plan of $21.5bnThe post CBN Hikes Interest Rates as OMO Bills Demand Slows appeared first on MarketForces Africa.