Investor enthusiasm surged as foreign portfolio investors and Nigerian deposit money banks (DMBs) collectively committed over ₦4.1 trillion to the Central Bank of Nigeria’s (CBN) Open Market Operations (OMO) bills on Monday.
The CBN re-entered the OMO market to absorb excess liquidity circulating in the banking system, which ballooned to about ₦6 trillion last week, according to market data from MarketForces Africa.
Commercial banks, seeking profitable avenues for idle funds amid cash reserve refunds, channelled their liquidity into the CBN’s standing deposit facility, earning up to 24.5% interest.
The apex bank’s first OMO auction last Friday attracted ₦3.32 trillion in subscriptions, against a ₦600 billion offer across three tenors — 88, 102, and 123 days to maturity. However, the CBN accepted only ₦98 billion, representing just 3% of total demand.
To further drain liquidity, the CBN issued another ₦600 billion worth of OMO bills on Monday. This new issuance was split equally across three maturities: 85 days, 99 days, and 120 days, each valued at ₦200 billion.
Market reports show that the latest offer drew an overwhelming ₦4.1 trillion in bids, reflecting investors’ strong preference for short-term instruments with high yields. Eventually, the CBN allotted ₦998.1 billion, with an average stop rate of 20.1%.
Analysts believe the strong subscription level underscores investors’ appetite for naira-denominated assets amid attractive yields and the CBN’s firm monetary tightening stance aimed at curbing inflation and stabilizing the exchange rate.
The OMO auction, a key liquidity management tool for the CBN, is expected to help mop up excess cash in the system, control inflationary pressures, and attract foreign portfolio inflows into Nigeria’s financial markets.
 collectively committed over ₦4.1 trillion to the Central Bank of Nigeria’s (CBN) Open Market Operations (OMO) bills on Monday.){kind=link}