The Overnight inter-bank rate declined by 1.29 percent to close at 4.07 percent on Friday after the Central Bank of Nigeria (CBN) on Thursday mopped-up a total of N330 billion from the financial system, via Open Market Operation (OMO).
Also, the Open Buy Back (OBB) rate, the money market instrument used to raise short term capital, declined by 1.64 percent to close at 3.00 percent.
The CBN on Thursday auctioned N50 billion each for 96-day and 187-day tenors and N230 billion for 362-day tenor.
While the longer term bill (362-day) was oversubscribed, the short (96-day) and medium term (187-day) instruments were undersubscribed.
“The long term bills remained significantly attractive relative to the Primary Market Auction (PMA). Seems the banks and Foreign Portfolio Investors (FPIs) restrained from the PMA to invest in the OMO auction,” Ayodeji Ebo, managing director, Afrinvest Securities limited said.
Total subscription for the longer term bill stood at N419.09 billion at a bid range of between 13.00 and 14.2 percent. Total sale was N336.09 billion at a stop rate of 13.32 percent. The offer is expected to mature on October 27, 2020.
The CBN only sold N10.50 billion out of N50 billion offered to investors for the medium term instrument at a stop rate of 11.75 percent. The offer, which matures on May 5, 2020 was undersubscribed to the tune of N11.50 billion at a bid range of between 11.5 and 13.0 percent.
The short term bill was also undersubscribed to the tune of N16.50 billion out of N50 billion earlier offered as investors bid at arrange of between 11.39 and 11.55 percent.
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However, the CBN sold a total of N16.50 billion at a stop rate of 11.55 percent. The offer matures on February 4, 2020.
The CBN intervened through direct Open Market Operations (OMO) auctions, to influence liquidity in the system during the third quarter of 2019. The tenors to maturity of the instruments ranged from 84 days to 364 days. Total amount offered stood at N3.43 trillion, subscription was N5.94 trillion and allotment wasN2.62 trillion. The bid rates ranged from 11.20 per cent to 15.50 per cent, while the stop rates ranged from 10.00 per cent to 13.50 per cent. Repayment of matured CBN bills amounted to N3.45 trillion, translating to a net injection of N823.71 billion.
At the Government securities market, NTBs of 91- 182- and 364-day tenors, amounting to N1,000.51 billion, N2,434.83 billion and N1,000.51 billion were offered, subscribed to and allotted, respectively, at the auctions held in the third quarter of 2019 on behalf of the Debt Management Office (DMO). The CBN’s economic report for the third quarter show that total subscription and allotment at the 91-day auction, were N158.03 billion and N80.62 billion, respectively. The bid rates ranged from 9.00 per cent to 17.00 per cent, while the stop rates ranged from 9.74 per cent to 11.10 per cent.
For the 182-day auction, total subscription and allotment were N233.18 billion and N124.42 billion, respectively. The bid rates ranged from 10.00 per cent to 15.00 per cent, while the stop rates ranged from 10.00 per cent to 11.80 per cent. Total subscription and allotment at the 364-day auction were N1,653.44 billion and N706.61 billion, respectively, with bid rates ranging from 10.50 per cent to 14.82 per cent, while stop rates ranged from 11.14 per cent to 13.30 per cent.
