CBN Sells N7.85tn in OMO Bills to Banks, Foreign Investors in Nov
With banks and foreign portfolio investors as the core investors, the Central Bank of Nigeria (CBN) raised about N7.9 trillion across primary market auctions in November due to a significant level of excess liquidity.
The financial system was bloated with excess funds that continued to find its way through the Standing Deposit Facility (SDF) of the CBN at a steep interest rate, which was above the average return on Treasury bills.
Deposit money banks (DMBs) practically pitched tents at the CBN window to earn a 24.50% rate on their excess cash amidst a weak appetite for lending.
With N1.1 million additional inflows from expired OMO, the monetary authority offered bills across standard tenors for investors’ subscription in a more aggressive manner to ensure a moderate funding position in the financial system.
Banks and foreign portfolio investors – the eligible market participants – sufficiently positioned for the auction saw successive oversubscriptions.
The OMO rates across the naira assets remained elevated across short-dated tenors, and the market witnessed the creation of additional tenors. To keep the market stable on liquidity, the CBN raised N7.85 trillion in OMO bills in November, according to TrustBanc Financial Group.
The amount mopped up translates to a significant 12.30% month-on-month increase when compared to N6.99 trillion sold to investors in October.
The market anticipates that heavy liquidity inflows in December will also trigger significant OMO bills actions. The financial system liquidity closed at N1.96 trillion ahead of inflows from expired fixed-income market assets in the new week.
The market expects inflow of N450 billion from 2- Dec-2025 and a N10.2 billion Bond coupon payment to bolster system liquidity in the new week. In the absence of any mop-up activity by the apex bank, analysts said they expect liquidity to remain buoyant. GTCO Delivers 52% Gain in 11-Month Amidst Earnings Pressure
