CBN Sells ₦2.63trn in OMO Bills as Stop Rates Tick Higher

Demand Concentrated in the Longer Bill

The Central Bank of Nigeria returned to the market on Thursday with a ₦2 trillion Open Market Operations offer, split evenly between 138-day and 180-day bills, and investors showed a clear preference for the longer tenor. The 180-day bill attracted ₦1.853 trillion in bids, nearly double its ₦1 trillion offer, and the central bank allotted ₦1.773 trillion — well above the amount it had planned to sell. The shorter 138-day bill, by contrast, drew ₦875.24 billion, short of its ₦1 trillion offer, with ₦855.24 billion allotted.

In total, the CBN sold ₦2.628 trillion against ₦2.728 trillion of bids. Taking up more than the announced offer is a familiar pattern when banking system liquidity is high: the auction followed a week in which maturing OMO bills returned about ₦2.07 trillion to the system and banks' placements at the CBN's Standing Deposit Facility had recently sat above ₦6 trillion.

Stop Rates Edge Up

Pricing moved against the recent trend. The 138-day bill cleared at 17.63% and the 180-day at 17.14%, both higher than at the October 6 auction, when comparable bills settled at 17.22% and 16.92%. The shorter bill carried the higher rate despite its weaker subscription, leaving a 49-basis-point gap between the two tenors.

The uptick matters because OMO stop rates had been drifting lower since the Monetary Policy Committee cut the benchmark rate by 350 basis points to 23% in September. A pause — or reversal — in that decline suggests the central bank is still willing to pay up to keep surplus liquidity out of the system, even as its headline policy stance eases.

What It Means for Markets

For banks and other authorised dealers, OMO bills remain the main tool for parking excess naira at yields well above Treasury bill rates — the 364-day Treasury bill cleared at 15.90% at the October 14 auction. As long as OMO yields near 17% are on offer, they compete directly with lending and with equities for institutional cash, one reason money keeps cycling back to the central bank instead of into risk assets.

The 138-day bill matures on March 9, 2027 and the 180-day bill on April 20, 2027. Investors will watch the next auction to see whether Thursday's higher stop rates were a one-off response to heavy maturities or the start of a firmer stance on liquidity absorption.