CBN Raises One-year OMO Bill Spot Rate to 22.48% Amid Inflation Concerns
The uptick at the long end reversed consecutive declines in spot rate pricing on one-year tenor OMO bill instruments to investors in the recent past auctions.
The apex bank had crashed the spot rate offered on the OMO bills instrument to 22.30% from as high as 25 per cent used to attract foreign investors into the financial market.
According to auction results, the CBN offered N150.00 billion worth of OMO bills auction across the three tenors. At the auction, investors showed no interest in short and mid-tenor bills, a development similar to experience amidst an accelerating inflation rate.
There were no bids recorded for both the short- and medium-term papers, details from auction results cited by investment firm AIICO Capital Limited revealed.
Investors staked N295.92 billion on the long-term paper or 363-day OMO bills, significantly higher than the amount offered across standard maturities. However, the CBN allotted ₦264.33 billion at 22.480% to market participants, 18 basis points above the previous spot rate.
In the secondary market, trading activities closed bearish, with selloffs seen across tenors in the OMO segment. Consequently, the average yield on OMO bills advanced by 175 basis points to 23.5% at the secondary market.
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