The Central Bank of Nigeria (CBN) sold N7.77 trillion worth of secondary market (Open Market Operations) treasury bills in 2020.
This indicates a decrease of 62 percent compared to the N13.92 trillion sold in 2019.
Secondary market (Open Market Operations, OMO) treasury bill is one of the instruments used by the CBN to control money supply in the economy. When the CBN wants to reduce money supply, it sells OMO treasury bills (TBs) and when it wants to increase money it sells OMO TBs.
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A breakdown showed that the CBN sold N4.4 trillion worth of OMO TBs in the first quarter of 2020 (Q1’20), up by 18 percent from N3.77 trillion sold in Q4’19, while it repaid N6.13 trillion worth of matured bills, translating to net liquidity injection of N2.36 trillion.
The amount of TBs sold in Q2’20 reduced by 54 percent in Q2’20 to N2 trillion, while CBN repaid N5.52 trillion worth of matured bills, translating to net liquidity injection of N3.52 trillion.
The apex bank further reduced OMO TB sales in Q3’20 by 69 percent to N625.13 billion, while it repaid N3.3 trillion worth of matured bills, translating to net liquidity injection N2.67 trillion.
The CBN, however, increased OMO TBs sales in Q4’20 slightly by 12 percent to N700 billion, while it repaid N3.53 trillion worth of matured bills, translating to net liquidity injection N2.83 trillion during the quarter.
© ControlTV 2021.
