Nigeria: CBN Raises N1.4 Trillion from Oversubscribed OMO Bills Auction

The Central Bank of Nigeria (CBN) has successfully raised ₦1.4 trillion through Open Market Operations (OMO) bills in its latest primary market auction. The offering, conducted on Thursday, witnessed strong investor interest, with local banks and foreign portfolio investors actively participating to capitalize on elevated yields in the naira money market.

The demand for money market instruments has surged in response to rising yields on naira assets, driven by inflationary pressures and a tightening monetary policy stance. Despite the CBN’s aggressive efforts to curb inflation through rate hikes, consumer price inflation has continued to climb, reaching 34.80% in December 2024.

Market analysts noted that the OMO auction attracted bids significantly exceeding the initial offer, underscoring the growing appetite for short-term government securities. The auction results showed that investors submitted bids totaling ₦1.92 trillion, far surpassing the ₦600 billion initially offered for subscription. In response to the overwhelming demand, the CBN increased its issuance, ultimately selling ₦1.4 trillion worth of OMO bills.

Stop rates for the 355-day and 362-day maturities were finalized at 21.3249% and 21.45%, respectively, reflecting the market’s pricing of inflation risks and policy expectations. The significant oversubscription highlights investors’ continued preference for high-yield naira-denominated assets, particularly amid ongoing foreign exchange market reforms and monetary policy adjustments.

As the CBN continues its liquidity management strategy, the impact of these auctions on market interest rates and inflation trends will be closely monitored by analysts and investors alike.