Yields on Nigerian Open Market Operation (OMO) bills climbed by 15 basis points to an average of 22.2% in the secondary market, as traders adjusted portfolios ahead of two major CBN auctions last week.
The Central Bank of Nigeria offered a combined ₦1.2 trillion in OMO bills in its continued bid to absorb excess liquidity from the financial system. The move triggered mild selloffs across the short-term OMO curve, as both domestic banks and foreign portfolio investors rebalanced holdings in anticipation of possible rate realignments.
The uptick in yields came amid cautious investor sentiment and global uncertainties, with analysts citing geopolitical comments by U.S. officials about Nigeria’s security situation as a contributing factor to the brief volatility.
During the week, the CBN floated two separate OMO auctions, each worth ₦600 billion. The first attracted subscriptions of ₦1.18 trillion, indicating a bid-to-offer ratio of 2.0x. Eventually, the CBN allotted ₦273.60 billion at stop rates of 21.69% and 21.84% for the 56-day and 84-day maturities, respectively.
In parallel, the Nigerian Treasury bills (NTB) market traded on mixed sentiments, though demand remained strong as investors sought to reinvest funds from unmet bids. The 3 September 2026 bill led the charge, reversing prior profit-taking as buyers positioned ahead of the midweek NTB auction.
At the auction, the apex bank offered ₦650 billion split into ₦100 billion (91-day), ₦100 billion (182-day), and ₦450 billion (364-day) tenors. Subscription levels rose sharply to ₦1.18 trillion, compared to ₦750.91 billion in the previous auction. Eventually, ₦546.34 billion was allotted, with stop rates unchanged for short-term bills at 15.30% and 15.50%, while the 364-day bill dipped by 10bps to 16.04%.
Overall, average NTB yields closed the week at 17.6%, reflecting sustained investor interest despite the tightening bias in the money market.
