The Central Bank of Nigeria (CBN) would be conducting an open market operations (OMO) where it will be offering investors’ opportunity to stake money on new bills.
The monetary authority will sell OMO bills worth N500 billion across standard maturities in an effort to attract forex inflows from foreign investors. The OMO bill was priced at 24.44 per cent at the primary market auction last week, where the CBN raised a total of N254.90 billion.
After the monetary policy rate was adjusted higher at its recently concluded meeting, spot rates on short term instruments have surged. Analysts are projecting that spot rates across standard maturities could be priced higher at the end of auction to attract foreign portfolio investors.
The auction is however expected to tighten the financial system liquidity further, and shift money market rates to double digits high. “We anticipate that interbank rates will increase as the CBN plans to sell N500 billion worth of OMO securities”, AIICO Capital Limited said in a note.
