The Central Bank of Nigeria (CBN) successfully raised over ₦1 trillion at its last Open Market Operations (OMO) auction held on Friday, April 25, 2025
The auction, which initially targeted ₦500 billion across two different maturities, attracted overwhelming investor demand, leading to a 102% oversubscription and total bids nearing ₦1.4 trillion.
The surge in demand reflects investors’ desire to lock in high yields amid Nigeria’s persistent inflation and rising money supply.
Notably, the 319-day OMO bill, maturing on March 10, 2026, was the most sought-after instrument, drawing ₦1.062 trillion in bids—over four times the CBN’s offer of ₦250 billion. The central bank eventually allotted ₦688.30 billion at a stop rate of 22.73%. Meanwhile, the 298-day bill, maturing on February 17, 2026, also attracted strong interest, receiving ₦329.54 billion in bids, leading to an allotment of ₦319.54 billion at a stop rate of 22.37%.
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In total, the CBN raised ₦1.008 trillion, more than double its initial offer, showcasing the liquidity still present in the system despite previous tightening efforts such as the record-high 50% Cash Reserve Ratio (CRR) and a 27.5% benchmark interest rate.
This auction comes at a critical time as Nigeria’s broad money supply (M3) continues to expand, growing 24% year-on-year to ₦114.22 trillion as of March 2025. The increase, fueled by a surge in net foreign assets, complicates the CBN’s efforts to reduce liquidity and tame inflation.
Market analysts view the strong demand for longer-tenor OMO bills as a bet that high interest rates will persist, with financial institutions eager to secure attractive returns. And despite cautions from analysts, including those from J.P. Morgan about potential risks to Nigeria’s economy, investor confidence in the OMO instruments is still strong.
