CBN Raises N1.9trn from OMO Auction Amid Strong Liquidity Surge

The Central Bank of Nigeria (CBN) raised about N1.9 trillion through its latest Open Market Operations (OMO) auction after strong investor demand driven by elevated liquidity in the financial system.

Details of the OMO auction conducted on Friday showed that the apex bank initially offered N600 billion across three maturities of 11 days, 39 days and 102 days.

However, total subscriptions surged to about N2.5 trillion as investors aggressively sought to lock funds into high-yield short-term instruments following a significant liquidity inflow into the money market.

System liquidity had expanded sharply to N5.92 trillion after the market recorded an inflow of about N1.97 trillion from maturing OMO bills, creating excess cash within the banking system and boosting appetite for the auction.

The strongest demand was recorded for the 102-day tenor, which attracted subscriptions of N1.73 trillion against the N200 billion initially offered by the CBN.

Following the strong participation, the apex bank allotted N1.72 trillion for the 102-day instrument at a stop rate of 20.37 per cent, underscoring sustained investor confidence despite the slightly lower yield relative to shorter-tenor instruments.

The 11-day bill also witnessed robust demand, attracting subscriptions worth N225 billion, while the CBN sold N220 billion at a stop rate of 21.80 per cent.

The strong patronage for the shorter-duration instrument reflected investors’ continued preference for near-term maturities amid uncertainty surrounding interest rate direction and liquidity conditions in the fixed income market.

Meanwhile, the 39-day tenor attracted subscriptions of about N588 billion but recorded “No Sale,” indicating that the CBN rejected submitted bids, likely due to pricing considerations and efforts to avoid endorsing lower yield expectations.

Overall, the auction highlighted strong market liquidity conditions and persistent investor appetite for high-yield government securities despite moderating stop rates.