CBN Raises N1.2 Trillion from OMO and Treasury Bills Auctions

The Central Bank of Nigeria (CBN) raised N1.2 trillion from its Open Market Operations (OMO) and Treasury Bills auctions as part of its liquidity management strategy last week. The auctions were conducted in the primary market to absorb excess liquidity caused by large inflows from maturing OMO and Treasury Bills.

The auctions attracted strong participation, with oversubscriptions recorded from local banks, foreign portfolio investors, asset managers, and other institutional players. On Wednesday, Nigerian Treasury Bills worth N230 billion were offered, followed by an OMO auction on Thursday.

At the OMO auction, the CBN offered N600 billion across short-term tenors of 89 days and 124 days. The exercise drew a total subscription of N1.02 trillion, reflecting a robust bid-to-offer ratio of 1.69x. Notably, more than N1.0 trillion of the bids were concentrated in the 124-day tenor, highlighting investors’ preference for slightly longer maturities to secure higher yields, according to Cowry Asset Management Limited.

The auction results showed that a total of N897.2 billion was allotted, with stop rates of 25.50% (89-day) and 25.99% (124-day). The CBN also conducted its final Nigerian Treasury Bills auction for August, offering N230 billion across 91-day, 182-day, and 364-day maturities.

The breakdown revealed that 91-day bills worth N50 billion were offered, alongside N30 billion in 182-day bills and N150 billion in 364-day bills. Demand was strong at N396 billion, with around 90% directed towards the 364-day tenor as investors looked to mitigate reinvestment risks.

Total allotments amounted to N303.78 billion, with stop rates rising on the 91-day and 364-day bills to 15.35% and 17.44%, respectively, while the 182-day paper remained unchanged at 15.50%. The bid-to-cover ratio fell to 1.30x from 2.12x at the previous auction, signalling slightly moderated demand despite abundant liquidity.

Looking ahead, another N350 billion in OMO maturities is expected to enter the system this week, a development analysts say will continue to sustain liquidity in the Nigerian financial markets.