CBN OMO auction attracts N1.88trn in subscriptions as stop rates decline
The Central Bank of Nigeria (CBN) conducted an Open Market Operations (OMO) auction on 6 March 2025, attracting total subscriptions of N1.88 trillion—more than three times the initial N600 billion on offer.
Despite the strong investor demand, stop rates on the 355-day and 362-day bills declined further, reflecting a shift in the fixed-income market as the CBN continued to moderate yields.
At the latest auction, the stop rate for the 355-day bill fell to 19.19 per cent from 21.32 per cent in the previous auction, marking a 2.13 percentage point drop. Similarly, the 362-day bill cleared at 19.45 per cent, down from 21.35 per cent, representing a 1.90 percentage point decline.
The auction featured two maturities: 355-day and 362-day OMO bills, each with N300 billion on offer. However, the CBN ultimately allotted N1.68 trillion in total sales, demonstrating strong investor appetite.
For the 355-day bill, total bids amounted to N760.70 billion, with the CBN allotting N725.70 billion. The bid range for this tenor was between 18.80 per cent and 20.64 per cent, with the final stop rate settling at 19.19 per cent.
Meanwhile, the 362-day bill attracted even greater interest, with subscriptions reaching N1.12 trillion and final allotments totalling N951.20 billion. The bid range stood between 18.88 per cent and 20.18 per cent, while the stop rate closed at 19.45 per cent.
The decline in stop rates comes as the CBN continues to fine-tune its liquidity management strategy, balancing inflation control with the need to maintain investor confidence. The high demand for OMO bills suggests that investors remain eager to secure risk-free yields, even at reduced rates.
A key factor influencing yields is the recent rebasing of Nigeria’s Consumer Price Index (CPI) by the National Bureau of Statistics (NBS). Under the new methodology, inflation for January 2025 was reported at 24.48 per cent—significantly lower than the 34.80 per cent recorded in December 2024 under the previous framework.
This adjustment has reinforced expectations that the CBN may not need to raise interest rates aggressively, contributing to the recent decline in OMO yields.
Additionally, at its February 2025 Monetary Policy Committee (MPC) meeting, the CBN opted to maintain the Monetary Policy Rate (MPR) at 27.50 per cent, adopting a more cautious stance. The decision was based on the need to evaluate the impact of the rebased CPI and ensure that inflation remains on a downward trajectory before making further policy adjustments.
Despite the moderation in yields, investor demand remains exceptionally strong, particularly for the 362-day bill, which accounted for nearly 60 per cent of total subscriptions.
Similarly, on 5 March 2025, the Federal Government of Nigeria (FGN), through the CBN, conducted a Treasury Bills (T-Bills) auction, offering N650 billion. The auction witnessed significant investor interest, with total subscriptions reaching N1.92 trillion, the majority of which were directed towards the 364-day instrument.
Despite the overwhelming demand, the stop rate on the one-year T-Bill declined to 17.82 per cent, marking its lowest level since September 2024, as the Debt Management Office (DMO) continues its efforts to curb rising borrowing costs.
