Q: How are T-bills different from OMO?
Warren Oluwasanya
Last Update et år siden
T-Bills and OMO (Open Market Operation) are similar and work almost the same way. Whilst T- Bills are issued to finance government budget deficit, OMOs are issued by the CBN for monetary policy management i.e., to control the volume of money in circulation. OMOs are also discount instruments in that you get your interest upfront, but they can also be bought in the primary and secondary market. Depending on the objective and aggressiveness of the CBN per time, it might be possible to get a higher rate on OMOs than T-Bills. OMO is also exempted from taxes. OMOs are issued at irregular intervals.