The Central Bank of Nigeria (CBN) has successfully raised a total of N2.93 trillion through recent auctions of Nigerian Treasury Bills (NTBs) and Open Market Operation (OMO) bills, reflecting strong investor appetite for short-term government securities amid evolving economic conditions.
Treasury Bills are short-term debt instruments issued by the CBN to finance government spending, while OMO bills serve a dual purpose: they not only raise funds but also help the apex bank manage liquidity and regulate money supply in the financial system.
According to information obtained by Daily Sun, the CBN conducted a Nigerian Treasury Bills auction midweek, where it initially offered securities valued at N400 billion across three tenors—91 days, 182 days, and 364 days. However, the auction witnessed overwhelming interest from investors, with total bids reaching N1.54 trillion, representing a bid-to-offer ratio of approximately 3.9 times.
In response to the robust demand, the CBN exercised its discretion to allot a total of N714.38 billion, significantly higher than the amount originally offered. A substantial portion—N650.28 billion—was directed toward the longer 364-day maturity, indicating investors' preference for longer-dated instruments. Stop rates across all maturities declined, a sign of heightened demand and competitive bidding.
Similarly, at the Open Market Operation auction held on April 25, the CBN offered N500 billion worth of instruments across two tenors—298 days and 319 days. The auction drew subscriptions totaling N1.39 trillion, yielding a bid-to-offer ratio of 2.8 times. The apex bank ultimately allotted N1.01 trillion, reinforcing the trend of strong market appetite for high-yield, short-term securities.
In total, the CBN was able to mop up N2.93 trillion from the NTB and OMO auctions within a single week, highlighting the resilience of investor interest despite tightening liquidity conditions globally and domestically.
Speaking on the outcome of the auctions, a Lagos-based fixed income analyst noted that the surge in demand was driven largely by excess liquidity within the banking sector and a cautious investment approach among institutional players. "Even though real returns are negative when adjusted for inflation, the nominal yields remain relatively attractive compared to alternative investment options," the analyst explained.
Looking ahead, market watchers suggest that demand for short-term government securities may moderate as liquidity in the financial system is expected to tighten in the coming weeks, which could in turn place upward pressure on yields in future auctions.
Moreover, the CBN’s Monetary Policy Committee (MPC) has maintained a hawkish policy stance in its bid to curb inflationary pressures. Should this trend continue, short-term yields are likely to edge higher as investors recalibrate their expectations in response to evolving monetary conditions.
Nevertheless, some analysts argue that the underlying strength in demand could persist if the CBN continues to manage system liquidity to maintain relative stability in interest rates. They point to investors' preference for safe, predictable returns amid broader economic uncertainties as a factor that may continue to underpin the market.
Beyond raising short-term funds for government operations, the CBN’s active role in the NTB and OMO markets is seen as crucial for broader macroeconomic management, including controlling inflation, steering liquidity, and stabilizing the naira in the foreign exchange market.
As economic conditions continue to shift, the CBN’s strategy in the short-term debt markets will remain a key indicator for both market participants and policymakers tracking the health of Nigeria’s financial ecosystem.
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