In a strategic move aimed at controlling liquidity within Nigeria’s financial system, the Central Bank of Nigeria (CBN) initiated a high-profile open market operation (OMO) auction this week, successfully drawing ₦1.15 trillion in bids from investors across two different tenors.
The apex bank launched the auction on Monday, aligning it with its ongoing monetary tightening and liquidity mop-up agenda. The offering comes just ahead of the maturity of ₦985 billion in OMO instruments, expected to settle on Tuesday, June 17, 2025.
Initially, the CBN made ₦600 billion worth of Nigerian OMO instruments available to the market. However, investor appetite significantly exceeded expectations, with both banks and foreign portfolio investors placing aggressive bids, encouraged by a slight downturn in the country’s inflation rate and renewed confidence in naira-based assets.
Auction results indicated that bids from market participants surpassed the offer, with strong demand recorded on both the 155-day and 204-day tenors. Out of the total ₦1.15 trillion subscription received, the CBN allotted ₦1.07 trillion to successful bidders. The stop rates for the instruments came in at 24.20% and 24.59%, respectively, highlighting the central bank’s hawkish stance and the attractive yields currently available in Nigeria’s money market.
Investors are now anticipating significant inflows into the system, with total maturities from existing OMO bills projected to reach ₦985.88 billion on June 17. Additionally, an extra ₦27.19 billion in Nigerian Treasury Bills is due to mature on June 19, potentially increasing market liquidity.
Meanwhile, trading activity in the secondary market started the week on a subdued note. Most dealers and institutional players kept a close eye on the OMO auction results, leading to a quiet session in the OMO bill segment of the secondary market.
The central bank’s aggressive liquidity-tightening move signals its resolve to maintain inflationary control and stabilize naira volatility through strategic interest rate actions and market interventions.
In a strategic move aimed at controlling liquidity within Nigeria’s financial system, the Central Bank of Nigeria (CBN) initiated a high-profile open market operation (OMO) auction this week, successfully drawing ₦1.15 trillion in bids from investors across two different tenors.
The apex bank launched the auction on Monday, aligning it with its ongoing monetary tightening and liquidity mop-up agenda. The offering comes just ahead of the maturity of ₦985 billion in OMO instruments, expected to settle on Tuesday, June 17, 2025.
Initially, the CBN made ₦600 billion worth of Nigerian OMO instruments available to the market. However, investor appetite significantly exceeded expectations, with both banks and foreign portfolio investors placing aggressive bids, encouraged by a slight downturn in the country’s inflation rate and renewed confidence in naira-based assets.
Auction results indicated that bids from market participants surpassed the offer, with strong demand recorded on both the 155-day and 204-day tenors. Out of the total ₦1.15 trillion subscription received, the CBN allotted ₦1.07 trillion to successful bidders. The stop rates for the instruments came in at 24.20% and 24.59%, respectively, highlighting the central bank’s hawkish stance and the attractive yields currently available in Nigeria’s money market.
Investors are now anticipating significant inflows into the system, with total maturities from existing OMO bills projected to reach ₦985.88 billion on June 17. Additionally, an extra ₦27.19 billion in Nigerian Treasury Bills is due to mature on June 19, potentially increasing market liquidity.
Meanwhile, trading activity in the secondary market started the week on a subdued note. Most dealers and institutional players kept a close eye on the OMO auction results, leading to a quiet session in the OMO bill segment of the secondary market.
The central bank’s aggressive liquidity-tightening move signals its resolve to maintain inflationary control and stabilize naira volatility through strategic interest rate actions and market interventions.
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