CBN Raises N1.2trn from OMO, Treasury Bills Auctions
The Central Bank of Nigeria (CBN) raised N1.2 trillion from its open market operation and Treasury bills auction as part of its liquidity management efforts last week. The auctions were conducted as primary market auctions to reduce excess liquidity triggered by huge inflows from expired OMO bills and Treasury bills.
Both auctions were oversubscribed by local banks, foreign portfolio investors, asset managers, and other institutional players that participated. Nigerian Treasury bills worth N230 billion were auctioned on Wednesday, followed by an open market operation on Thursday.
At the OMO bill auction, the CBN floated N600 billion across short-term tenors: 89-day and 124-day, which recorded a total subscription of N1.02 trillion—translating to a healthy bid-to-offer ratio of 1.69x.
Interestingly, over N1.0 trillion worth of bids were skewed toward the 124-day paper, showing investors’ hunger for relatively longer tenors to lock in juicy yields, according to Cowry Asset Management Limited.
Auction results revealed that a total sum of N897.2 billion was allotted to investors, with stop rates printing at 25.50% (89-day) and 25.99% (124-day). The Apex Bank also conducted its last Nigerian Treasury bills auction for August, offering N230 billion across the standard tenors: 91-day, 182-day, and 364-day.
The breakdown showed that Nigeria Treasury bills with 91-day maturity totalling N50 billion were offered to investors for subscription.Also, the CBN opened N30 billion worth of 182-day bills for subscription while floating 364-day bills worth N150 billion at the primary market auction.
The investment banking firm reported that demand remained robust at N396 billion, though skewed heavily (90%) toward the 364-day tenor as investors sought to hedge reinvestment risks.
Total allotments hit N303.78 billion, with stop rates advancing on the 91-day and 364-day maturities to 15.35% and 17.44%, respectively, while the 182-day paper stayed flat at 15.50%. Notably, the bid-to-cover ratio fell to 1.30x from 2.12x at the previous auction, suggesting slightly moderated demand despite the liquidity surge.
In the new week, another N350 billion in OMO maturities is expected to hit the system—a development that analysts think would keep liquidity buoyant. #CBN Raises N1.2trn from OMO, Treasury Bills Auctions FCMB Climbs As Investors React to Capital Raise Plan
