Excess Liquidity Hits N604bn As CBN Suspends OMO Issuance

The Central Bank of Nigeria on Tuesday suspended issuance of the Open Market Operation bill despite the large liquidity in the interbank system.

The booming interbank system liquidity was estimated at N604.45bn.

Despite this robust liquidity, the apex bank held issuance of the OMO bill.

The CBN makes use of the OMO as a tool to inject or mop up excess liquidity from a bank or group of banks.

The development saw market offers dried up following the non-issuance of the OMO bill at the Treasury Bill space.

Details of the activities revealed that there were several bids across the tenors while no offers were seen across the benchmark.

Across tenors, December and January bills witnessed low trade volumes which settled at three per cent.

The data also revealed that bids for May/June at 4.8 per cent had no offers to match.

The non issuance of the OMO by the apex bank led to a compressed yield by an average nine basis points on the benchmark.