The Central Bank of Nigeria (CBN) raised a complete of N804.85 billion at its Open Market Operations (OMO) public sale held on Monday, April 29, 2025, as buyers proceed to indicate a powerful urge for food for high-yield securities amid persistent extra liquidity within the monetary system and elevated inflation expectations.
The public sale attracted whole subscriptions value N1.057 trillion, representing a 111% oversubscription. Though sturdy, the demand was barely decrease than the earlier public sale held on April 25, 2025, the place the CBN raised N1.008 trillion from N1.391 trillion in subscriptions after providing the 2 N500 billion payments.
Within the newest public sale, the CBN provided two long-tenor devices—329-day and 350-day payments—every at N250 billion. The outcomes revealed a pointy distinction in investor demand between each maturities, with buyers overwhelmingly favouring the longer 350-day paper of their bid to lock in greater returns for an extended period, signalling continued confidence in Nigeria’s sovereign debt and expectations of sustained excessive rates of interest.
350-day invoice sees distinctive demand
- The 350-day OMO invoice, maturing on April 14, 2026, recorded a large subscription of N923.60 billion—greater than thrice the N250 billion provided—highlighting the depth of liquidity available in the market and the continued desire for longer-dated devices. The central bank allotted N698.60 billion at a cease price of twenty-two.73%, with bid charges ranging between 22.4990% and 22.9700%.
- This sturdy investor turnout mirrors the pattern seen within the earlier OMO public sale held simply 4 days earlier, the place the 319-day instrument attracted N1.062 trillion in subscriptions—its highest for the 12 months—and was allotted N688.30 billion on the identical cease price of twenty-two.73%.
- The consistency in demand for longer-dated payments displays investor sentiment that the CBN will keep its present hawkish stance for an prolonged interval, because it seeks to fight inflation and stabilise the naira. Monetary establishments, asset managers, and offshore gamers are subsequently more and more favouring long-term payments to lock in engaging actual returns in anticipation of future price moderation.
329-day invoice receives tepid response
- In distinction, the 329-day instrument maturing on March 24, 2026, obtained comparatively weak curiosity. It attracted a complete subscription of N133.25 billion—simply over 53% of the N250 billion provided—and the apex bank allotted N106.25 billion. The cease price was barely decrease at 22.69%, whereas the bid vary got here in tighter between 22.3200% and 22.8900%.
- The decrease demand for this paper could also be attributed to its marginally shorter tenor and the truth that buyers have been clustering across the longest obtainable durations in current auctions. The bid patterns recommend that market members are eager on maximising yield over an extended horizon, particularly given expectations that rates of interest might peak quickly earlier than a gradual downward adjustment.
What you need to know
This public sale follows a blockbuster sale on Friday, April 25, 2025, the place the CBN provided N500 billion throughout two maturities and ended up elevating N1.008 trillion following a 102% oversubscription. The earlier public sale’s longer tenor—the 319-day invoice—was essentially the most sought-after, and its momentum seems to have carried over into the present public sale.
- Nonetheless, the full quantity raised this time—N804.85 billion—is decrease than the N1.008 trillion raised within the April 25 sale, primarily resulting from underwhelming demand for the 329-day paper. Regardless of that, the constant over-subscription of the 350-day invoice highlights sturdy market urge for food, pushed by excessive liquidity situations and a restricted variety of secure, high-yield funding autos.
- The sustained curiosity in OMO payments comes at a time when Nigeria’s cash provide continues to develop quickly. In accordance with the CBN’s March 2025 Cash and Credit score Statistics, broad cash provide (M3) rose by 3.2% month-on-month to N114.22 trillion in March, and by 24% year-on-year from N92.19 trillion in March 2024. This surge in liquidity has amplified demand for risk-free belongings, significantly OMO payments that are providing double-digit returns.
- Whereas internet home belongings (NDA) declined by 11.7% to N69.05 trillion, a 38.9% improve in internet overseas belongings (NFA) to N45.17 trillion signifies stronger capital inflows and exterior reserves, additional boosting market liquidity. This liquidity glut is making financial tightening more difficult, regardless of the CBN’s instruments such because the 50% Money Reserve Ratio (CRR)—the best globally—and the 27.75% benchmark rate of interest.
Inflation in Nigeria stays stubbornly excessive. Headline inflation surged to 24.23% in March 2025 from 23.18% in February, with month-on-month inflation spiking by 3.90%—nearly double the speed recorded a month earlier. This elevated inflation, pushed by hovering meals costs, transport prices, and vitality tariffs, continues to erode shopper buying energy and complicate financial coverage implementation.
OMO auctions have subsequently develop into a vital liquidity sterilisation instrument, serving to the CBN to soak up extra money and anchor market rates of interest. By way of these auctions, the central bank alerts its financial coverage course whereas guiding yield expectations and dampening speculative exercise within the foreign money and fairness markets.
With one other Financial Coverage Committee (MPC) assembly on the horizon, market members will carefully watch whether or not the central bank adjusts charges additional or maintains its present course.
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