The Central Bank of Nigeria (CBN) raised a total of N1.008 trillion at its Open Market Operations (OMO) auction held on Friday, following overwhelming investor interest that led to a 102% oversubscription.
The result underscores the CBN’s continued aggressive monetary tightening stance, aimed at mopping up excess liquidity and reining in inflation, which has remained stubbornly high despite elevated interest rates and a record-setting 50% Cash Reserve Ratio (CRR)—the highest globally.
Initially offering N500 billion across two maturities, the auction attracted nearly N1.4 trillion in total bids, as investors scrambled to lock in high yields on government securities amid sustained inflation and a rapidly expanding money supply.
Strong demand for longer-dated bills
The 319-day OMO bill, maturing on March 10, 2026, emerged as the most sought-after instrument. It received bids worth N1.062 trillion, over four times the CBN’s offer of N250 billion. The central bank eventually allotted N688.30 billion at a stop rate of 22.73%, with bid rates ranging from 20.39% to 23.75%.
The strong uptake suggests market expectations of prolonged high interest rates, prompting investors to lock in attractive returns over a longer tenor.
The 298-day bill, maturing on February 17, 2026, also saw significant interest. Against a similar offer of N250 billion, it attracted N329.54 billion in bids. The CBN allotted N319.54 billion at a stop rate of 22.37%, with bid rates ranging between 20.45% and 23.75%.
Liquidity remains abundant despite tightening
In total, the CBN mopped up N1.008 trillion, more than double its initial offer—an indication of the significant liquidity still present in the banking system despite ongoing tightening measures.
The auction comes amid a sharp rise in Nigeria’s broad money supply (M3), which reached N114.22 trillion in March 2025, marking a 24% year-on-year increase from N92.19 trillion in March 2024. On a monthly basis, M3 rose by 3.2%, up from N110.71 trillion in February.
The uptick is largely driven by a 38.9% increase in net foreign assets (NFA), which climbed to N45.17 trillion, pointing to stronger capital inflows and improved external liquidity conditions.
Despite the CBN’s tightening tools, including the exceptionally high CRR, the persistent growth in money supply continues to pose a challenge to inflation control efforts.
