The Central Bank of Nigeria (CBN) has continued its aggressive liquidity management strategy, successfully raising a total of ₦804.85 billion through its latest Open Market Operations (OMO) auction held on Monday, April 29, 2025. This follows a previous auction on Friday, April 25, where the apex bank garnered ₦1.008 trillion, reflecting sustained investor appetite for high-yield government securities amidst prevailing economic conditions.
April 29 Auction Details
In the most recent auction, the CBN offered two long-tenor instruments: 329 day and 350 day bills, each with an offer size of ₦250 billion. The auction attracted total subscriptions worth ₦1.057 trillion, representing a 111% oversubscription. Investors showed a marked preference for the longer 350-day bills, aiming to lock in higher returns over an extended period, indicating confidence in Nigeria’s sovereign debt and expectations of sustained high interest rates.
April 25 Auction Overview
The earlier auction on April 25 saw the CBN offering ₦500 billion across two maturities. The auction received total bids of nearly ₦1.4 trillion, resulting in a 102% oversubscription. The 319-day OMO bill, maturing on March 10, 2026, was particularly popular, attracting ₦1.062 trillion in subscriptions—over four times the CBN’s offer of ₦250 billion. The central bank allotted ₦688.30 billion at a stop rate of 22.73%, with bid rates ranging between 20.39% and 23.75%. Similarly, the 298-day bill, maturing on February 17, 2026, received bids totaling ₦329.54 billion against the same ₦250 billion on offer, with ₦319.54 billion allotted at a stop rate of 22.37%.
Monetary Policy Context
These auctions are part of the CBN’s broader strategy to manage excess liquidity in the financial system and curb inflationary pressures. The high subscription rates indicate robust investor confidence in government securities, driven by attractive yields and a desire to hedge against inflation. The CBN’s proactive approach in offering longer-tenor instruments suggests an anticipation of prolonged tight monetary conditions.
Investor Sentiment and Market Implications
The overwhelming demand for longer tenor OMO bills underscores investors’ expectations of sustained high interest rates and a stable macroeconomic environment. By locking in yields for extended periods, investors aim to maximize returns amidst economic uncertainties. The CBN’s successful auctions reflect its commitment to maintaining monetary stability and controlling inflation through effective liquidity management.
