The Central Bank of Nigeria (CBN) conducted an Open Market Operations (OMO) auction, issuing N1.9 trillion in bills. Investor demand totalled N2.2 trillion, significantly surpassing the amount offered. Despite strong overall interest, demand was unevenly distributed across maturities. Investors showed limited appetite for mid-tenor instruments, directing most bids towards short and long-term tenors. The structure of the auction revealed a preference for either immediate or extended yield horizons, with the middle segment largely overlooked. This pattern has persisted in recent auctions, suggesting a strategic shift in investor positioning. The CBN offered only N600 billion of the total N1.9 trillion at auction, allocating the remainder via direct placement. No specific reasons were provided for the weak response to mid-tenor papers.
The CBN's N1.9 trillion OMO sale saw investors bypass mid-tenor instruments despite strong overall demand. This leaves the central bank relying more on direct placements, which lack transparency. Nigerian fixed-income investors are effectively forced to choose between short-term liquidity or long-dated commitments, with no viable middle ground. The absence of balanced tenor demand exposes a structural gap in the yield curve that the CBN has yet to address.
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