CBN Raises N2.93 Trillion from T-Bills, OMO Auctions as Investor Demand Surges

The Central Bank of Nigeria (CBN) has successfully raised N2.93 trillion from its recent auctions of Treasury Bills (T-Bills) and Open Market Operation (OMO) bills, driven by an overwhelming demand from investors.

The auctions, which took place midweek, saw the apex bank offer instruments worth N400 billion across three maturities, but investors’ appetite was significantly higher, with total subscriptions reaching N1.54 trillion.

The strong demand resulted in a bid-to-offer ratio of 3.9 times, indicating a highly competitive market. In response, the CBN decided to over-allot a total of N714.38 billion, with the majority of the allocation, N650.28 billion, going to the longer 364-day paper.

The stop rates declined across all tenors, reflecting the robust market interest in the securities.

The success of the auctions is a testament to the confidence of investors in the Nigerian economy and the attractiveness of the T-Bills and OMO bills as investment instruments.

The CBN’s ability to raise such a significant amount of funds will provide a much-needed boost to the government’s finances and help to stabilize the economy.

The T-Bills and OMO bills are essential tools used by the CBN to manage liquidity in the economy and raise funds for the government. The strong demand for these instruments suggests that investors are optimistic about the country’s economic prospects and are willing to invest in its short-term securities.

The breakdown of the auction results shows that the 364-day paper was the most sought-after, with N650.28 billion allocated to this tenor. This is not surprising, given the relatively higher yields offered by the longer-term paper.

The stop rates for the 91-day, 182-day, and 364-day papers declined to 10.00%, 11.50%, and 12.75%, respectively.

The CBN’s decision to over-allot the T-Bills and OMO bills is a strategic move to take advantage of the strong investor demand and raise more funds for the government.

The move is also expected to help reduce the cost of borrowing for the government and provide a more stable source of funding.

Overall, the success of the T-Bills and OMO auctions is a positive development for the Nigerian economy, and it is expected to have a positive impact on the country’s financial markets.

As the CBN continues to use these instruments to manage liquidity and raise funds, it is likely that investor demand will remain strong, providing a much-needed