Strong Demand for CBN OMO Bills Reaches N4.93tn

On Thursday, investors submitted N4.93tn worth of bids for the Central Bank of Nigeria’s (CBN) Open Market Operations (OMO) bills, highlighting robust demand for high-yield short-term instruments in a high-interest-rate environment. This amount surpassed the N600bn initially offered by the CBN across two maturities, indicating a growing preference for OMO bills over Treasury bills.

The CBN allotted N2.60tn, significantly more than the initial offer. The 103-day OMO bill, maturing on 24 November, attracted N1.27tn in subscriptions against an offer of N300bn, with an allotment of N450bn at a stop rate of 20.39%.

The 138-day instrument, maturing on 29 December, received N3.66tn in bids, more than 12 times the N300bn offered, with the CBN allotting N2.15tn at a stop rate of 20.01%. The yield differential between OMO bills and Treasury bills is creating incentives for investors to favor OMO instruments, potentially impacting banks’ deposit pricing as they may need to offer more competitive rates to retain liquidity.