Cbn new rules on omo auctions

You're referring to the new rules on OMO (Open Market Operations) auctions by the Central Bank of Nigeria (CBN).

As of 2022, the CBN has introduced some changes to its OMO auction rules to improve the effectiveness of its monetary policy and stabilize the foreign exchange market. Here are some of the key changes:

  1. Increased frequency of OMO auctions: The CBN now conducts OMO auctions more frequently, with a minimum of 2-3 auctions per week, to better manage liquidity and stabilize the market.
  2. Increased auction sizes: The CBN has increased the size of its OMO auctions to accommodate the growing demand for government securities and to provide more liquidity to the market.
  3. New auction calendar: The CBN has introduced a new auction calendar, which allows for more flexibility in the timing and frequency of auctions. This is aimed at improving the predictability and transparency of the auction process.
  4. Introduction of a new auction type: The CBN has introduced a new type of OMO auction, known as the "Reverse Repurchase Agreement" (RRP) auction. This type of auction allows the CBN to absorb excess liquidity from the market by selling government securities to banks and other financial institutions, which then agree to repurchase them at a later date.
  5. Changes to the auction process: The CBN has made some changes to the auction process, including the introduction of a new bidding system and the use of a single price auction mechanism. This is aimed at improving the efficiency and transparency of the auction process.
  6. Increased participation: The CBN has encouraged more participation in OMO auctions by reducing the minimum bid size and increasing the number of eligible bidders.
  7. Improved communication: The CBN has improved its communication with market participants by providing more detailed information on the auction process, including the auction schedule, auction parameters, and auction results.

These changes are aimed at improving the effectiveness of the CBN's monetary policy, stabilizing the foreign exchange market, and promoting economic growth in Nigeria.