In a strategic move, Cardoso lures foreign investors with historic OMO yields as the Central Bank of Nigeria (CBN) introduces a groundbreaking offer on one-year OMO bills. Yielding at 32%, the bill marks the highest return since the inception of the CBN’s OMO (Open Market Operations) and aims to attract substantial foreign portfolio investments to help strengthen the economy.
The historic OMO yields come at a critical time, as the CBN grapples with stabilizing the Naira. Offering such a high yield, which matches Nigeria’s August inflation rate of 32%, is an aggressive effort to encourage foreign investors to bring their capital into the country. With inflation running high, the lure of these attractive returns is designed to offset inflationary pressures while boosting investor confidence.
On Thursday, as Cardoso lured foreign investors with these historic OMO yields, the Naira responded by rebounding to N1576/$, gaining 5% on the day. The Central Bank’s intervention included selling $60 million to banks to support the currency. Analysts believe that with sustained actions like these, Nigeria’s foreign exchange reserves could benefit from a resurgence in foreign inflows.
Furthermore, the 32% yield on OMO bills signals the CBN’s determination to stabilize the economy, even if that means adjusting policies to attract more capital. With investors keenly watching the market, Cardoso’s approach could bring about a renewed interest in Nigeria’s financial landscape.
While the OMO yields are attracting global attention, analysts warn that continued strategic interventions from the CBN will be crucial in ensuring lasting stability for both the Naira and the overall economy.
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