CBN mops up 264bn naira in Thursday's OMO auction

The Central Bank of Nigeria (CBN) has been actively intervening in the country's money markets through its Open Market Operations (OMO) auctions. This week alone, the CBN conducted three OMO auctions on Monday, Tuesday, and Thursday, mopping up a total of 264 billion naira. Despite these efforts, the interventions seem to have had little impact on the currently liquid money market. Taiye Owonubi, Senior Portfolio Manager at AXA Mansard, shed some light on the subscription levels and investor participation in these auctions during an interview on CNBC Africa. According to Owonubi, the high subscription levels can be attributed to the significant liquidity in the market. The CBN's aim seems to be finding a balance between liquidity and financial stability. Owonubi highlighted the unique dynamics of the current market situation, with factors such as the CBN's regulatory changes impacting market activities. One such regulation introduced by the CBN mandates banks to maintain a minimum Loan-to-Deposit Ratio of 60%, encouraging lending to the real sector to stimulate economic growth. The true value of the Naira, according to Owonubi, is around 370 to 400 against the US dollar, with stability being a key focus for the CBN to support the economy. Macroeconomic factors such as global economic slowdown, US-China trade tensions, and domestic political uncertainties also play a role in shaping market dynamics. Owonubi acknowledged the importance of these factors in influencing market sentiments and investment decisions.