The Central Bank of Nigeria (CBN) successfully raised ₦98 billion through its latest Open Market Operation (OMO) auction on Friday, despite receiving bids totaling a massive ₦3.32 trillion from both domestic and foreign investors.
According to market data, the apex bank had initially offered ₦600 billion worth of OMO bills to commercial banks and offshore portfolio investors. However, the overwhelming demand underscored the high liquidity levels within Nigeria’s financial system and the increasing interest of foreign investors in naira-denominated assets.
The CBN floated the bills across three tenors — 88-day, 102-day, and 123-day maturities — as part of its liquidity management strategy. The auction marked the first significant issuance in weeks, following a prolonged period of market inactivity that had pushed liquidity levels in the banking system beyond ₦7 trillion, according to MarketForces Africa.
As banks with excess cash sought to place idle funds at the CBN’s standing deposit facility, the monetary authority responded with a sizable OMO issuance. The resulting bid-to-offer ratio of 5.5x highlighted the intensity of demand.
While the 88-day bills remained unsubscribed, the 102-day and 123-day maturities cleared marginally higher at 20.49% and 20.61%, respectively. Analysts noted that the CBN’s conservative approach — allotting only ₦98 billion — signals its preference for controlling system liquidity without expanding its debt issuance portfolio excessively.
Market observers believe the OMO auction reflects a delicate balance between maintaining exchange rate stability and managing inflationary pressures, as the apex bank continues to fine-tune monetary policy tools amid rising naira volatility and shifting investor sentiment.
