CBN Sells N7.12trn OMO Bills to Investors in Q2
The Central Bank of Nigeria (CBN) sold OMO bills worth N7.12 trillion in the second quarter of 2025 to eligible investors, banks, and foreign portfolio investors to manage excess liquidity in the financial system.
The Apex Bank floated eight OMO auctions in the last three months to combat excess liquidity and keep money market rate in check. The monetary authority aggregate offer was N4.5 trillion across the standard tenors.
The total of OMO bills allotted to investors in the first quarter settled at N7.12 trillion despite one no-sale auction being recorded, according to investment banking firm Partian Limited.
With an elevated yields in the market, Nigerian banks have become aggressively active in positioning themselves in the fixed income market with eyes on OMO bills and Treasury bills to drive earnings growth.
The annual rate on these high-yield-attracting fixed income instruments has generally lower lending appetite, and cash-rich lenders are taking advantage of this, with some having an average of a trillion naira placement in money market instruments.
In the secondary market on Tuesday, the average yield on OMO Bills contracted by 31 basis points (bps) to 26.1% due to sustained bargain hunting. The OMO bills segment saw firm buying interest, particularly at the long end of the curve, where yields dropped by 50 bps to 25.90% last week.
The short and medium ends recorded yield contractions of 2 bps and 12 bps to 26.14% and 27.19%, respectively, pulling the average OMO yield down to 26.41% on Friday.
At the previous week, the average yield on Nigerian OMO bills was 26.70%, suggesting the rate fell each week in June 2025 due to sustained bargain hunting in the segment. #OMO Auction Provokes Rates Surge in Money Market
