Interest Rate on 1-Year OMO Bill Drops by 10bps

The interest rate offered on one-year open market operations (OMO bills) crashed during the monetary authority’s primary market auction on Monday. With periodic or intermittent rate repricing across tenors, the apex bank has been offering higher rates, particularly on one-year bills.

According to auction results, spot rate on one year bills declined by 10 basis points from 22.43% to 22.33% due to large bids received at the auction. At the OMO auction, the Central Bank of Nigeria (CBN) offered N500 billion across all maturities, according to traders.

Demand at the auction was strong, with a bid-to-offer of 2.08 times. Stop rates for the 105-day bills settled at 18.74% at the auction. The CBN sold 189-day bills at the spot rate of 19.59%. Additionally, a 357-day OMO bill was sold for 22.33%, which is 10 basis points less than the previous rate.

At various auctions conducted by the apex bank, subscription levels have been strong. The CBN has been offering higher rates than debt management office. Because of the excess subscription level, rates were re-priced at the auction, according to analysts. #Interest Rate on 1-Year OMO Bill Drops by 10bps Naira Rises by 19% as Forex Market Pressures Ease
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