The Central Bank of Nigeria has raised a total of N804.85bn at its Open Market Operations auction conducted on Monday, April 29, 2025, as investors continued to chase high-yield securities amid excess liquidity and elevated inflation expectations.

Total subscriptions at the auction stood at N1.057tn, representing an oversubscription of 111 per cent.

Although strong, it was slightly lower than the previous auction held on April 25, where the apex bank raised N1.008tn from N1.391tn in subscriptions after offering two N500bn bills.

In the latest auction, the CBN offered two long-tenor instruments — a 329-day and a 350-day bill — with each offered at N250bn.

However, investor demand tilted heavily towards the 350-day bill, as participants sought to lock in higher yields over a longer period. This reflected ongoing confidence in Nigeria’s sovereign debt and expectations that interest rates would remain elevated for longer.

The 350-day bill, which matures on April 14, 2026, saw robust interest, recording a subscription of N923.60bn, more than three times the offered amount.

The central bank allotted N698.60bn at a stop rate of 22.73 per cent, with bid rates ranging between 22.4990 percent and 22.9700 percent.

The strong investor turnout mirrored the trend from the previous auction, where the 319-day instrument attracted N1.062tn in bids and was allotted N688.30bn at the same stop rate.

Consistent demand for longer-dated securities highlights market expectations that the CBN’s hawkish stance on monetary policy will be sustained in a bid to contain inflation and stabilise the naira.

In contrast, the 329-day bill, which matures on March 24, 2026, received muted interest. The instrument attracted N133.25bn in subscriptions, representing just over half of the N250bn offered, with the CBN allotting N106.25bn.

The stop rate for this shorter bill stood slightly lower at 22.69 per cent, with bid rates ranging between 22.3200 per cent and 22.8900 percent.

Investors appear to be focusing on maximising yields by favouring the longest tenors available, a pattern that has been evident across recent auctions.

Monday’s auction followed a record-breaking sale on Friday, April 25, where the CBN raised N1.008tn after offering N500bn, driven by strong demand for longer-dated bills. However, the amount raised at the latest auction was lower, largely due to weaker interest in the 329-day paper.

Nonetheless, the continued oversubscription of the 350-day bill reflects a strong appetite for risk-free assets in an environment characterised by surging liquidity and limited high-yield investment options.

The heightened demand for OMO bills comes at a time when Nigeria’s broad money supply is expanding rapidly

According to the CBN’s latest Money and Credit Statistics, broad money (M3) rose by 3.2 per cent month-on-month to N114.22tn in March 2025, and by 24 per cent year-on-year from N92.19tn recorded in March 2024.

While net domestic assets fell by 11.7 per cent to N69.05tn, net foreign assets surged by 38.9 per cent to N45.17tn, driven by stronger capital inflows and external reserve build-up, further fuelling liquidity in the financial system.

Despite the apex bank maintaining the highest Cash Reserve Ratio globally at 50 per cent and a benchmark interest rate of 27.75 per cent, liquidity conditions have remained elevated, posing fresh challenges for monetary tightening efforts.

Headline inflation, meanwhile, accelerated to 24.23 per cent in March 2025 from 23.18 per cent in February, with month-on-month inflation soaring by 3.90 per cent, the sharpest pace recorded so far this year.

Rising food prices, higher transport fares, and increasing energy costs continue to erode consumer purchasing power, complicating the CBN’s inflation-fighting strategy.

OMO auctions have therefore become a critical tool for mopping up excess liquidity and anchoring short-term interest rates.

Through these sales, the CBN is signalling its monetary policy stance while helping to moderate speculative pressures in the currency and equity markets.