The Central Bank of Nigeria (CBN) has opened fresh open market operations (OMO) bills to foreign portfolio investors and authorised local deposit money banks (DMBs) for subscriptions at the primary market as about N240 billion was set to mature.
The monetary authority is in the process of conducting additional open market operations worth N500 billion across standard maturities on Tuesday, reinforcing its stance on tightening system liquidity amid persistently elevated levels.
This move is in line with efforts to sustain positive real returns, especially as headline inflation prints at 24.23%, Erad Partners Limited said in a note. The firm said with the Nigerian Treasury bills auction scheduled for Wednesday, market participants are keenly watching to see if today’s OMO issuance will drive yields higher across the curve.
In May, the market anticipates total inflows from FGN bonds, Nigerian Treasury, and OMO bill maturities to reach N3.45 trillion.
“The interplay between liquidity absorption and yield repricing remains in focus — the market awaits direction,” Erad Partners chief investment officer said in the note. OMO maturities of ₦239.150 billion, and it appears the monetary authority has become aggressive with OMO auctions again. After an initial slowdown in the first quarter, the CBN conducted OMO auctions twice in April.
In the last three weeks, the authority has opened OMO bills for subscriptions three times – partly to drive foreign currency inflows into the economy and manage liquidity. #CBN Offers OMO Bills for Subscription to Refinance Old Asset.
culled from the dmarketforce
