The Central Bank of Nigeria (CBN) has allotted N2.628 trillion in Open Market Operations (OMO) bills, exceeding its initial N2 trillion offer by N628.52 billion, as yields rose on both instruments at its October 22 auction.
The allotment represented an oversubscription of 31.43 per cent relative to the initial offer, with investors submitting bids worth N2.728 trillion. The outcome suggests that the CBN continues to rely on OMO instruments to manage banking-system liquidity despite its recent reduction in the benchmark interest rate.
The 180-day bill attracted the stronger demand, drawing subscriptions of N1.853 trillion against an offer of N1 trillion. The CBN allotted N1.773 trillion to the instrument at a stop rate of 17.14 per cent.
The shorter 138-day bill attracted N875.24 billion in subscriptions, below its N1 trillion offer. The apex bank allotted N855.24 billion at a higher stop rate of 17.63 per cent.
The 138-day instrument matures on March 9, 2027, while the 180-day bill matures on April 20, 2027.
The CBN accepted approximately 96.35 per cent of the total bids by value, leaving N99.54 billion unallotted. The longer-dated instrument accounted for about 67.92 per cent of total subscriptions.
The auction also recorded higher stop rates than the October 6 sale. The comparable 147-day and 182-day bills had cleared at 17.22 per cent and 16.92 per cent, respectively.
The latest 138-day rate was 41 basis points above the earlier shorter-tenor rate, while the 180-day rate rose by approximately 22 basis points from the previous comparable rate.
The increases suggest that the downward movement in OMO yields following the CBN’s September rate cut has paused, although the results alone do not establish a sustained reversal in the interest-rate cycle.
The auction came amid substantial liquidity in the banking system and projected OMO maturities of N2.067 trillion for the week beginning October 19. The latest allotment exceeded that projected maturity figure by approximately N562 billion in face value.
Banks’ placements at the CBN’s Standing Deposit Facility had remained above N6 trillion between October 14 and October 16, following an approximately N2.41 trillion OMO repayment on October 13.
In September, the CBN sold N17.51 trillion in OMO bills against N10.89 trillion in maturities, producing a net withdrawal of about N6.62 trillion in face value.
The October 22 auction reinforces the central bank’s continued use of securities sales to absorb excess liquidity, while the higher stop rates indicate that investors are demanding stronger returns on the latest instruments.
