CBO Raises OMR32.05 Million from Treasury Bills Issuance
The Central Bank of Oman (CBO) successfully conducted a treasury bills auction on Monday, raising a total of OMR32.05 million. This move is part of the government’s overarching strategy to manage its short-term liquidity needs.
The treasury bills auction was segmented into three different maturity periods, each catering to specific financial planning requirements. The first segment saw treasury bills valued at OMR5.05 million with a 28-day maturity period. These bills were traded at an average accepted price of OMR99.640 for every OMR100, a figure that also represents the minimum accepted price for this maturity bracket. The financial metrics further detail an average discount rate and yield of 4.69221 percent and 4.70916 percent respectively, underscoring the investment’s return within its short engagement period.
For the 91-day maturity segment, the CBO successfully allotted treasury bills amounting to OMR25 million. The trading dynamics for this category highlighted an average accepted price of OMR98.728 per OMR100, with the slightly lower minimum accepted price set at OMR98.725 per OMR100. The average discount rate was documented at 5.10198 percent while the yield escalated to 5.16771 percent, indicating a beneficial proposition for investors seeking intermediated investment horizons.
The auction also included a segment for the 182-day maturity treasury bills, where OMR2 million worth of bills were allocated. These bills were assigned an average and minimum accepted price of OMR97.440 per every OMR100. The financial returns on this longer-term investment were pegged at an average discount rate of 5.13407 percent and an average yield of 5.26895 percent, respectively.
Treasury bills are recognized as short-term, high-security financial instruments, backed by the Ministry of Finance. The CBO, acting as the Issue Manager, not only undertakes the issuance of these instruments but also facilitates their liquidity in the financial market through discounting and repurchase agreements (Repo). The interest rates currently applicable for the Repo operations stand at 6.00 percent, whereas the discount rate available on the Treasury Bills Discounting Facility with the CBO is set at 6.50 percent.
Beyond serving as a critical tool for managing government liquidity, Treasury Bills also play a vital role in fostering the development of the local money market. They establish a benchmark yield curve for short-term interest rates, facilitating a more predictable and stable financial environment for investors. Additionally, the government reserves the right to utilize these instruments not only for short-term liquidity management but also for financing its recurrent expenditures, thereby maintaining a balanced approach towards fiscal management and economic stability.
Through such strategic issuances, the Central Bank of Oman continues to support the Sultanate’s financial infrastructure by ensuring that both the government and investors have access to secure and flexible financial options to meet their respective short-term fiscal requirements.
