The Central Bank of Nigeria (CBN) sold approximately N2.6 trillion in Open Market Operations (OMO) bills during its latest auctions, reflecting sustained but moderated demand. At the March 30 auction, N662.9 billion was allotted for 8-day bills, N85.2 billion for 99-day bills, and N992.5 billion for 120-day instruments. The following day, N848.8 billion was sold in 140-day bills, while only N5 billion was taken up for the 70-day tenor, highlighting selective investor participation. Total subscriptions fell from about N3 trillion the previous week, when liquidity surged due to inflows from maturing securities and coupon payments. System liquidity remains robust, estimated between N8 trillion and N9 trillion, supporting strong appetite for high-yield, low-risk instruments. Analyst Omobola Adu of CSL noted the moderation may reflect partial absorption of excess funds or a shift into alternative instruments. Taiwo Kareem said liquidity is likely to stay in surplus, driven by maturing securities, bond coupons, and FAAC distributions. Victor Ogundijo attributed last week's surge to increased interbank liquidity. The CBN continues to sell above its initial offers, using OMOs to manage financial system liquidity. Analysts expect demand to remain strong if interest rates stay elevated.
The CBN is still soaking up excess cash, but the sharp drop in demand for the 70-day bill—just N5 billion allotted—reveals growing investor caution. With N2.6 trillion absorbed, it's clear that while liquidity remains high, players are no longer grabbing every instrument indiscriminately. This selectivity suggests markets are adapting to prolonged tight monetary policy, not just reacting to cash surpluses. For Nigerians, it means financial institutions are prioritising yield and flexibility, a sign the system is maturing even as inflation bites.
