By 
The Central Bank of Nigeria (CBN) successfully sold N1.63 trillion in Open Market Operation (OMO) bills to investors in two auctions conducted this week. This substantial allotment followed two previous auctions where bids were rejected.
The robust demand for OMO bills was driven by improved system liquidity, attributed to residual credits from the Federation Account Allocation Committee (FAAC). In the first auction, the CBN raised ₦869.46 billion, with the stop rate on the 1-year paper reaching 21.89%, according to investment banking reports.
In the subsequent auction, the CBN sold an additional ₦758.00 billion, with the 1-year paper yielding a slightly lower stop rate of 21.87%. Notably, spot rates on OMO bills have shown a slight decline since the initial sales under the current leadership of the apex bank.
This aggressive OMO issuance strategy aims to attract foreign exchange (FX) inflows from international investors seeking to invest in government debt instruments through primary market auctions. The CBN continues to explore various methods to boost FX inflows into the Nigerian financial markets, particularly as revenue from oil exports continues to fall short of expectations.
Allegedly, oil revenues have been pledged in oil-swap deals, while gross external reserves have been committed to various government agreements, including FX swaps and oil-backed loans.
In July, analysts noted that despite some interest in select bills, no sales were recorded during the first and second OMO auctions of the month.
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