The Central Bank of Nigeria’s Open Market Operations (OMO) auction saw poor demand on Friday despite offering a stop rate of 21.69 percent, suggesting the market is pushing back against the current rate environment and the central bank’s pricing.
The auction, which was carried out on Friday, October 31, offered N300 billion across a 46-day bill and a 60-day bill. The auction ended with a low total sale of N1.11 billion, despite a total offer of N600 billion and subscriptions of N359.28 billion at a stop rate of 21.69 percent.
Olaolu Boboye, SSA economist at CardinalStone said that the recent auction size suggests that the CBN does not want to sell long tenor bills because of the rollover risk.