The breakdown of the fixed income instrument showed that while the central bank offered a total of N86.709 billion in a 178-day tenor treasury bills, it also sold a total of N147.177 billion in 164-day bills.
The 178-day tenor bill was oversubscribed to the tune of N103.072
billion at the rate of 12.35 per cent. Similarly, the 164-day tenor was
oversubscribed as banks and discount houses staked a total amount of
N48.561 billion at 12.30 per cent.
OMO is a monetary policy instrument used for the discretionary selling
and buying of eligible securities in the money market by the central
bank, in order to regulate the cost and availability of credit so as to
achieve the desired level of money stock or macroeconomic objective.
Central banks engage in OMO in order to regulate the cost and
availability of credit and thereby influence the banking system credit
ability hi the economy so as to achieve economic stability and desired
level of money supply.
In line with its desire to contain inflation, the CBN had resuscitated the OMO market to reduce liquidity in the system.
The CBN Governor, Mallam Sanusi Lamido Sanusi, has never hidden his
disdain for double-digit inflation rate. The CBN had also sold a total
of N63.512 billion OMO last Friday.
Meanwhile, the naira was stable at the central bank’s regulated
Wholesale Dutch Auction System (WDAS) yesterday as it maintained its
value of N155.75 to a dollar. Whereas the CBN offered a total of $300
million, only $294 million was purchased by the 17 banks that
participated in the auction.
The local currency was also stable at the interbank market where it
closed at N157.45 to a dollar. Similarly, the naira closed at N159.50 to
a dollar at the Bureau De Change segment of the market.
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