Huge Funds Chase Nigerian OMO Bills in Search for 21% True Yield
The Central Bank of Nigeria (CBN) recorded exceptionally strong investor demand at its Open Market Operations (OMO) auction on 26 August 2026, receiving N4.26 trillion in subscriptions against a combined offer of N1 trillion across the 97-day and 132-day bills.
The auction outcome points to sustained investor appetite for high-yielding naira fixed-income instruments, even as the CBN continues to moderate stop rates while aggressively absorbing excess liquidity from the financial system.
For the 97-day bill, subscriptions reached N783 billion, compared with the N500 billion on offer. The CBN ultimately allotted N613 billion, while the stop rate declined by 49 basis points to 19.90%, from 20.39% at the preceding auction. On a true-yield basis, the instrument offered approximately 21.02%.
Demand was substantially stronger at the longer tenor. The 132-day bill attracted N3.48 trillion in subscriptions, nearly seven times the N500 billion offered. The CBN allotted N2.18 trillion at a stop rate of 19.65%, down 36 basis points from 20.01% previously. The corresponding true yield was approximately 21.16%.
In aggregate, the CBN sold N2.80 trillion, almost three times the N1 trillion initially offered. The unusually large oversubscription, coupled with the lower clearing rates, suggests that investors were prepared to accept modestly reduced nominal yields in exchange for locking in returns that remain above 21% on a true-yield basis.
From a market-liquidity perspective, the auction represents a significant sterilisation exercise by absorbing N2.80 trillion, which is well above the scheduled offer. The CBN has demonstrated both the depth of investor demand for OMO instruments and its capacity to withdraw substantial liquidity from the banking system.
The pricing outcome is equally significant. Despite the heavy oversubscription, stop rates declined across both maturities, indicating that competition among investors remains strong enough to compress yields. The stronger demand for the 132-day tenor further suggests a preference for extending duration where investors can secure comparable or slightly higher true returns.
Overall, the auction reinforces a bullish demand signal for CBN sterilisation instruments while highlighting the persistence of attractive naira fixed-income yields. With investors still willing to commit substantial liquidity at true returns above 21%, the latest OMO auction underscores the continuing appeal of short- to medium-term government-backed securities in Nigeria’s current monetary and liquidity environment. #Huge Funds Chase Nigerian OMO Bills in Search for 21% True Yield# CBN Reduces Rates on Nigerian OMO Bills, Raises N1.9trn
