The Central Bank of Nigeria (CBN) raised N1.008 trillion at its Friday Open Market Operations (OMO) auction, driven by a 102% oversubscription due to strong investor demand.
This reflects the CBN’s aggressive monetary tightening to curb excess liquidity and inflation, despite high interest rates and a record 50% cash reserve ratio.
Initially offering N500 billion across two maturities, the auction drew bids nearing N1.4 trillion as investors chased high-yield government securities amid rising inflation and money supply.
The 319-day OMO bill, maturing March 10, 2026, was the most sought-after, with N1.062 trillion in bids against a N250 billion offer, allotting N688.30 billion at a 22.73% stop rate.
The 298-day bill, maturing February 17, 2026, attracted N329.54 billion in bids for N250 billion offered, with N319.54 billion allotted at a 22.37% stop rate.
The auction’s success highlights persistent liquidity in the financial system. Nigeria’s broad money supply (M3) grew to N114.22 trillion in March 2025, up 24% year-on-year and 3.2% month-on-month, driven by a 38.9% rise in net foreign assets to N45.17 trillion, signaling robust capital inflows.
WHAT YOU SHOULD KNOW
CBN raising N1.008 trillion at its OMO auction underscores its commitment to tackling liquidity and inflation through aggressive monetary policy.
The 102% oversubscription reflects strong investor confidence in government securities, driven by high yields and a flight to safety amid economic uncertainty.
For sustainable results, CBN’s efforts must be complemented by fiscal discipline, structural reforms to address inflation drivers, and policies to boost private-sector lending.
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