The Central Bank of Nigeria (CBN) has raised a total of N1.008 trillion at its Open Market Operations (OMO) auction held on Friday.
The development affirms CBN’s aggressive monetary tightening stance aimed at mopping up excess liquidity and cooling inflationary pressures that have persisted despite elevated interest rates and a record-high cash reserve ratio.
There was an overwhelming investor demand that led to a 102% oversubscription.
OMO is a key monetary policy tool used by CBN to regulate liquidity in the financial system.
This involves buying or selling government securities, such as Treasury Bills, to control the amount of money available in the banking system, influencing interest rates and overall economic activity.
When it sells securities, it absorbs liquidity from the system, reducing the amount of money available for lending and spending. Conversely, when it buys securities, it injects liquidity, increasing the amount of money available for lending and spending.
The CBN’s OMO activities have implications for interest rates, borrowing costs, and overall economic activity. By adjusting liquidity and interest rates, the CBN can influence consumer spending, investment, and economic growth ¹.
The auction, which initially offered N500 billion across two maturities, attracted total bids of nearly N1.4 trillion, with investors seeking to take advantage of high-yield government instruments amid rising inflation and expanding money supply.
The most in-demand instrument at the auction was the 319-day OMO bill, maturing on March 10, 2026. It drew a total subscription of N1.062 trillion, more than 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 between 20.39% and 23.75%.
The demand surge reflects investor expectations that high interest rates will persist, prompting a move to lock in attractive yields for the longer term.
In comparison, the 298-day bill, maturing on February 17, 2026, also performed strongly. It received bids totalling N329.54 billion versus the same N250 billion on offer. The CBN allotted N319.54 billion at a stop rate of 22.37%, with bid rates falling between 20.45% and 23.75%.
In total, the CBN raised N1.008 trillion, more than double its initial offer, and a clear sign of the liquidity that remains available in the financial system despite policy tightening.
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The OMO auction comes at a time when Nigeria’s broad money supply (M3) continues to rise sharply, undermining the CBN’s efforts to reduce liquidity through tools like the 50% cash reserve ratio (CRR)—the highest in the world.
According to data released by the CBN, M3 grew to N114.22 trillion in March 2025, marking a 24% year-on-year increase from N92.19 trillion in March 2024.
On a month-on-month basis, money supply rose by 3.2%, up from N110.71 trillion in February. The growth was largely attributed to a 38.9% increase in net foreign assets (NFA), which reached N45.17 trillion, indicating stronger capital inflows and external liquidity.
