Interest rates on Nigerian Open Market Operation (OMO) bills have declined, driven by heightened investor demand for naira-denominated assets during the latest primary market auction. In the final auction of 2024, the Central Bank of Nigeria (CBN) lowered spot rates for OMO bills, reflecting the rising appetite for these instruments.
Both foreign portfolio investors (FPIs) and local banks showed significant interest, leveraging the attractive yields offered by short-term liquidity management tools. Analysts attribute the CBN’s decision to its ongoing efforts to attract U.S. dollar inflows through competitive pricing of OMO bills.
At the recent auction, the CBN offered OMO bills worth ₦500 billion across two maturities. Despite the allotment matching the offered amount, total subscriptions reached an impressive ₦931.32 billion, indicating robust demand.
The stop rates were set at 23.93% and 23.95%, marking slight reductions of 2 and 3 basis points, respectively, compared to the previous rates of 23.95% and 23.98%.
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