Business
CBN raises N804.85bn at OMO auction amid strong investor demand
The Central Bank of Nigeria (CBN) successfully raised N804.85 billion at its Open Market Operations (OMO) auction, driven by strong investor appetite for high-yield, long-tenor securities amidst excess liquidity and elevated inflation expectations.
The Central Bank of Nigeria (CBN) successfully raised N804.85 billion at its Open Market Operations (OMO) auction, driven by strong investor appetite for high-yield, long-tenor securities amidst excess liquidity and elevated inflation expectations
The Central Bank of Nigeria (CBN) successfully auctioned N804.85 billion worth of Open Market Operations (OMO) bills on Monday, April 29, 2025, demonstrating continued strong investor interest in high-yield securities.
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The auction witnessed total subscriptions of N1.057 trillion, indicating an oversubscription rate of 111 per cent.
While robust, the total amount raised was slightly lower than the N1.008 trillion raised at the previous auction on April 25, which saw subscriptions totaling N1.391 trillion for two N500 billion bills.
In the latest auction, the CBN offered two long-tenor instruments: a 329-day bill and a 350-day bill, each with an offer size of N250 billion.
Notably, investor demand was significantly skewed towards the longer 350-day bill, maturing on April 14, 2026, which attracted subscriptions of N923.60 billion, more than three times the offered amount.
The CBN allotted N698.60 billion of this bill at a stop rate of 22.73 per cent, with bid rates ranging from 22.4990 per cent to 22.9700 per cent.
This strong interest reflects market confidence in Nigeria’s sovereign debt and expectations of sustained elevated interest rates.
Conversely, the 329-day bill, maturing on March 24, 2026, experienced more muted demand, receiving subscriptions of N133.25 billion, just over half of the N250 billion offered.
The CBN allotted N106.25 billion of this shorter-tenor bill at a slightly lower stop rate of 22.69 per cent, with bid rates ranging between 22.3200 per cent and 22.8900 per cent.
The consistent strong demand for longer-dated securities underscores market expectations that the CBN will maintain its hawkish monetary policy stance to combat inflation and stabilize the naira.
This trend of investors favouring longer tenors to maximize yields has been evident in recent OMO auctions.
The heightened demand for OMO bills occurs against a backdrop of rapidly expanding broad money supply in Nigeria.
According to the CBN’s latest data, broad money (M3) increased by 3.2 per cent month-on-month to N114.22 trillion in March 2025, and by 24 per cent year-on-year.
Despite the CBN maintaining a high Cash Reserve Ratio and benchmark interest rate, liquidity in the financial system remains elevated, posing ongoing challenges for monetary tightening efforts.
Headline inflation also rose to 24.23 per cent in March 2025, further fueling demand for high-yield instruments.
OMO auctions remain a critical tool for the CBN in managing excess liquidity and anchoring short-term interest rates, while also signaling its monetary policy direction and moderating speculative pressures in the financial markets.
President Bola Tinubu has reaffirmed the Federal Government’s commitment to rehabilitating and repositioning Nigeria’s dormant national refineries, declaring that the facilities will not be allowed to become stranded assets.
Tinubu was represented by the Permanent Secretary of the Ministry of Petroleum Resources, Mrs Patience Oyekunle, at the 20th OTL Africa Downstream Energy Week in Lagos on Monday.
The President said the government is adopting a more rigorous and commercially sustainable approach to the rehabilitation of the Port Harcourt, Warri and Kaduna refineries.
“At the same time, the government remains committed to ensuring that existing national refining assets are not allowed to become stranded investments,” the statement said.
“We are pursuing a more rigorous, commercially sustainable approach to the rehabilitation and repositioning of our refineries, supported by technical assessment, stronger partnerships, and improved operational discipline.”
The objective, according to the administration, is for Nigeria to refine more of its crude oil, create greater domestic value and become a reliable supplier of energy to Africa.
The national refineries, managed by the Nigerian National Petroleum Company Limited (NNPC), have remained largely inactive for years despite significant spending on turnaround maintenance. The NNPC has signed a memorandum of understanding with Chinese firms as part of ongoing efforts to revive the facilities.
Tinubu also noted the contribution of private refining capacity, particularly the Dangote Refinery, which has reached its 650,000 barrels-per-day nameplate capacity, in strengthening Nigeria’s prospects of becoming a net exporter of refined petroleum products.
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