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The Central Bank of Nigeria (CBN) is set to issue Open Market Operation (OMO) bills worth N600 billion at the primary market auction, a strategic move aimed at managing liquidity and addressing inflationary pressures ahead of the upcoming monetary policy meeting.
The auction, scheduled for Thursday, is part of the CBN’s broader efforts to attract foreign currency inflows from offshore investors looking to capitalize on Nigeria’s elevated yields while maintaining liquidity control in the financial system.
Breakdown of OMO Bills Issuance
According to sources, the OMO bills will be targeted at high-yield-seeking fixed-income investors, with the issuance split across two standard tenors. The apex bank plans to raise N600 billion, offering N300 billion each for the 355-day and 362-day maturities.
Strong Investor Appetite Anticipated
Market analysts predict a strong subscription rate, driven by robust investor demand for naira-denominated assets amid improving foreign exchange market conditions. In anticipation of the auction, yields in the secondary market have declined, with the average yield on OMO bills dropping by 28 basis points to 26.6%.
Cautious Investor Sentiment Expected
Despite the high investor interest, analysts suggest that market participants may adopt a cautious approach ahead of the auction, as they assess potential monetary policy adjustments and broader economic factors.
The outcome of the OMO auction is expected to provide further insights into investor sentiment and liquidity trends within Nigeria’s financial markets.
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