CBN Raises N2.4trn from OMO Bills as Demand Surges, Mid-Tenor Rate Hits 21.9%
CBN Raises N2.4trn from OMO Bills as Demand Surges, Mid-Tenor Rate Hits 21.9%
The Central Bank of Nigeria has raised about N2.4 trillion through the sale of Open Market Operations (OMO) bills at its latest primary market auction, as strong investor demand prompted the monetary authority to increase allotments beyond the initial offer.
The auction, conducted on Monday, was aimed at reducing excess liquidity in the banking system. The apex bank initially offered about N600 billion worth of short-term instruments across 8-day and 113-day tenors, but subscriptions significantly exceeded the offer.
Market participants reported that total bids reached roughly N3.0 trillion, reflecting strong interest from banks and foreign portfolio investors. Following the oversubscription, the CBN allotted about N2.4 trillion, with stop rates settling at 21.90 percent for the 8-day paper and 19.79 percent for the 113-day bill.
Activities in the fixed-income market showed mixed trends during the shortened trading week, with notable changes in the Treasury bills segment.
At its second Treasury bills auction for the month, the CBN offered about N1.05 trillion across the 91-day, 182-day and 364-day maturities, higher than the N850 billion offered at the previous sale.
Investor appetite remained strong, with subscriptions rising to about N3.06 trillion, supported by high liquidity levels in the financial system, which averaged over N7 trillion ahead of the auction.
Despite the strong demand, total allotment declined to approximately N691.86 billion, compared to N933.92 billion at the prior auction, suggesting a cautious and price-sensitive issuance strategy by the monetary authority.
Yields were largely stable, with the 91-day Treasury bill rate unchanged at 15.95 percent, while the 182-day and 364-day bills recorded slight declines to about 16.62 percent and 16.63 percent, respectively.
Analysts say the latest auction results indicate the CBN’s continued effort to manage liquidity while keeping interest rates attractive enough to sustain foreign and domestic investor participation in the market.
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