CBN Attracts N12.14 Trillion in OMO Bids Amid Rate Cuts

The Central Bank of Nigeria (CBN) concluded September with two Open Market Operations (OMO) auctions that garnered N12.14 trillion in bids, surpassing the N3.4 trillion offered. Approximately N6.94 trillion was allotted, indicating subscriptions were about 3.57 times the amount offered.

The auctions followed a 350 basis point reduction in the Monetary Policy Rate to 23%. The September 24 auction saw N5.741 trillion in subscriptions against an offer of N900 billion, while the September 29 auction attracted N6.399 trillion against N2.5 trillion offered.

Stop rates on longer tenors fell by about 170 basis points during September. David Adonri, CEO of Highcap Securities Limited, noted that the attractiveness of Nigerian fixed-income yields compared to global rates and naira stability contributed to strong demand.

Tajudeen Olayinka, CEO of Wyoming Capital Partners Limited, suggested that the MPR reduction reflected existing market conditions and that broader participation in the market could sustain OMO demand despite declining yields. As of October 2, banks had over N4.6 trillion at the Standing Deposit Facility.