The Central Bank of Nigeria (CBN) recent directive excluding individual and corporates in Nigeria from participating in its open market operations (OMO) transactions both primary and secondary has the tendency to boost activities in treasury bills and other investment options.
The CBN new investment policy implies that only deposit money bank and foreign portfolio investors can invest in OmO while other investors including non bank institutions expected to invest in other money market products.
The apex bank decision according to financial analysts was in line with its drive to divert liquidity away from risk free instruments to the real sector.
They also said that such restrictions from participation in OMO transactions would force local investors to look for an alternative and low risk market to invest their funds, thereby creating more liquidity in other assets.
Managing Director, APT Securities and Funds Limited, Malam Garba Kurfi said the implications of banning Corporates and individual from participation Open Market Operations (OMO) transactions would help to control market liquidity, as the apex bank had earlier denied Bank from participating in Treasury bill (TBs).
