The Central Bank of Nigeria (CBN) held an Open Market Operation (OMO) auction on February 13, 2025, drawing substantial investor interest with total subscriptions reaching N1.915 trillion. This strong participation suggests ongoing confidence in the CBN’s liquidity management tools.
Despite the robust overall subscription, demand at this auction was notably lower compared to the previous OMO auction held on January 31, 2025. Interestingly, while demand decreased, the CBN increased the volume of successful bids.
The central bank sold N1.395 trillion worth of OMO bills, marking a significant 39.5% increase from the N1 trillion sold in January. This suggests a strategic move by the CBN to potentially manage market liquidity or interest rates, even with slightly reduced investor demand.
CBN’s recent auction (OMO) featured two tenors: 355-day and 362-day bills, each initially offered at N300 billion. Investor demand heavily favoured the longer-term 362-day bill, with subscriptions reaching a substantial N1.499 trillion, significantly exceeding the offered size. While still oversubscribed, the shorter 355-day bill attracted lower subscriptions of N415.85 billion.
- Advertisement -
Even with slightly softer investor demand in February, the CBN significantly increased the volume of successful bids at its OMO auction. Total allotted bids rose by 39.5%, from N1 trillion in January to N1.395 trillion in February. This substantial increase suggests a more proactive approach by the CBN to manage liquidity, potentially to curb inflationary pressures and maintain monetary stability.
In response to this varied demand, the CBN increased the total volume of bills sold. N402.85 billion of the 355-day bills were allotted, while N993 billion of the 362-day bills were sold. This brought the total sales for the February auction to N1.395 trillion, a considerable jump from the N1 trillion sold in January.
