The Central Bank of Nigeria (CBN) carried out an Open Market Operations (OMO) public sale on March 6, 2025, attracting N1.88 trillion in whole subscriptions—greater than thrice the N600 billion initially supplied.
Regardless of the robust demand, cease charges on the 355-day and 362-day payments declined once more, signaling a shift within the fixed-income market because the CBN moderated yields.
The most recent public sale noticed the cease charge for the 355-day invoice drop to 19.19% from 21.32% within the earlier public sale, representing a 2.13 share level decline. Equally, the 362-day invoice cleared at 19.45%, down from 21.35%, reflecting a 1.90 share level decline.
Public sale consequence
- The public sale featured two maturities, 355-day and 362-day OMO payments, every with N300 billion on supply. Nevertheless, whole gross sales exceeded the preliminary providing, because the CBN allotted N1.68 trillion, demonstrating strong investor urge for food.
- For the 355-day invoice, buyers bid N760.70 billion, leading to an allotment of N725.70 billion. The bid vary for this tenor was 18.80% to twenty.64%, with the ultimate cease charge settling at 19.19%, marking a 2.13 share level drop from the earlier public sale.
- The 362-day invoice noticed even larger curiosity, attracting N1.12 trillion in subscriptions, with a closing allotment of N951.20 billion. The bid vary stood at 18.88% to twenty.18%, whereas the cease charge closed at 19.45%, a 1.90 share level decline from the earlier public sale.
Why are cease charges falling?
The drop in cease charges comes amid continued efforts by the CBN to fine-tune liquidity administration, balancing inflation management with the necessity to preserve investor confidence. The excessive demand for OMO payments means that buyers stay eager on locking in risk-free yields, even at decrease charges.
One key issue influencing charges is the latest rebasing of Nigeria’s Client Worth Index (CPI) by the Nationwide Bureau of Statistics (NBS).
Beneath the brand new methodology, inflation for January 2025 was reported at 24.48%, considerably decrease than the 34.80% recorded in December 2024 underneath the previous framework.
This revision has fueled expectations that the CBN is probably not underneath stress to hike charges aggressively, contributing to the latest moderation in OMO yields.
Additionally, at its February 2025 Financial Coverage Committee (MPC) assembly, the CBN opted to carry the Financial Coverage Fee (MPR) regular at 27.50%, signaling a extra cautious stance. The choice was primarily based on the necessity to assess the impression of the rebased CPI and be certain that the inflation decline is sustained earlier than making additional coverage changes.
Nevertheless, regardless of the speed moderation, demand stays exceptionally excessive, notably for the 362-day invoice, which accounted for nearly 60% of whole subscriptions.
What it’s best to know
- Nairametrics earlier reported that the Federal Authorities of Nigeria (FGN), by the Central Bank of Nigeria (CBN), launched the outcomes of its Treasury Payments (T-Payments) public sale carried out on March 5, 2025.
- The public sale, which supplied N650 billion, noticed robust investor demand, attracting N1.92 trillion in whole subscriptions, with the majority of bids directed on the 364-day instrument.
- Regardless of the heightened demand, the cease charge on the one-year invoice fell to 17.82%, the bottom stage since September 2024, because the Debt Administration Workplace (DMO) continues to push again towards rising borrowing prices.
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