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The Central Bank of Nigeria’s (CBN) recent open market operations (OMO) auction saw a repeat of the previous trend, with no sales recorded due to investor reluctance. Both local and foreign investors opted out, reflecting growing disinterest in OMO bills as spot rates for standard maturities remain stagnant.
The CBN has been stringent on spot rate pricing, particularly for one-year OMO bills, which had previously attracted significant investments. This change in policy has further dampened investor enthusiasm.
In the latest primary market auction, the CBN had offered N150 billion worth of OMO bills. However, changing market dynamics led to a disappointing subscription level of N86.5 billion, resulting in a bid-to-offer ratio of 0.6x within the range of 23.00% – 26.89%.
According to an update from Cordros Capital Limited, the soft demand led to an auction with no allotments, mirroring the outcome of the previous auction. The investment firm anticipates that yields in the Treasury bills secondary market will continue to rise, predicting that foreign investors will persist in divesting their holdings due to the unstable naira.
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