Yields likely to drop as OMO moves higher in Nigeria’s money markets

The Central Bank of Nigeria's recent decision to exclude corporates and individuals from participating in the Open Market Operations (OMO) auctions has sent ripples through the country's fixed income market. Emmanuel Odiaka, a Fixed Income and Forex Analyst, shed light on the implications of this move in a recent interview with CNBC Africa. Odiaka highlighted the confusion that has arisen from the apex bank's directive and stressed the need for clarity on how these changes will impact market dynamics moving forward. As the market awaits the outcome of today's OMO auction, concerns loom over the potential effects on yields and liquidity. The exclusion of corporates and individuals from the primary OMO auctions has raised questions about the secondary market and the role of local institutional investors. Odiaka emphasized the importance of understanding the central bank's strategy regarding these securities and the implications for monetary policy. The decision to restrict certain players from participating in OMO auctions could have far-reaching consequences on market stability and investor confidence. The market is bracing for a period of adjustment as participants navigate these changes and assess the impact on yields and market dynamics.