On Monday, 2 June 2025, the Central Bank of Nigeria (CBN) conducted a new round of Open Market Operations (OMO) auction, offering ₦600 billion worth of bills across two tenors. The exercise is part of the apex bank’s ongoing efforts to manage system liquidity and stabilise short-term interest rates.
Beyond the money markets, Nigeria’s federal government used the 2025 Global Entrepreneurship Congress (GEC) to reaffirm its commitment to Micro, Small, and Medium Enterprises (MSMEs), announcing over ₦1.3 trillion in strategic interventions. During the high-level event, officials highlighted the central role MSMEs play in driving economic resilience and industrial transformation.
In the week under review, system liquidity improved significantly, with the money market opening on Thursday with a surplus of over ₦670 billion. Consequently, short-term borrowing rates showed modest changes: the Overnight (O/N) rate edged up slightly to 26.96% from the previous week’s 26.95%, while the Open Repo Rate (OPR) was maintained at 26.50% from the previous week. Meanwhile, the Naira traded between a high of $/₦1,584.00 on Monday and a low of $/₦1,545.00 on Thursday, finally closing at $/₦1,551.00 on the same day.
Recent auction data reflects a bifurcated investor appetite. Two instruments were offered; a 106-day bill maturing 16 September, 2025, and a 232-day bill maturing 20 January, 2026. They drew starkly different levels of interest. The shorter tenor attracted just ₦210.12 billion in subscriptions against its ₦300 billion offer, while the 232-day bill recorded a staggering ₦1.32 trillion in bids, signalling overwhelming market demand for longer-dated securities.
The stop rates also reinforced this trend. The 106-day instrument cleared at 24.20%, while the 232-day paper cleared marginally higher at 24.64%, both near the upper bounds of their respective bid ranges. The CBN allotted ₦204.87 billion and ₦1.31 trillion respectively, signalling a dual mandate: liquidity tightening while accommodating market appetite for longer-dated instruments.
This development follows on the heels of consecutive OMO issuances the previous week, during which over ₦1.6 trillion was raised from domestic and foreign investors. In one auction alone, the central bank received ₦1.15 trillion in bids and allotted ₦1.13 trillion, a strong indication of robust demand for high-yield short-term securities.
The CBN’s assertive liquidity management posture (evident in its willingness to overshoot offer sizes for longer-dated bills) speaks to its goal of mopping up excess liquidity and manage inflationary pressures.
TENOR | AUCTION DATE | OFFER (₦’ B) | BIDS (₦’ B) | RANGE OF BIDS (%) | STOP RATES (%) | PREVIOUS STOP RATES (%) | TOTAL SALE (₦’ B) |
106-DAY | 02-06-2025 | 300.00 | 210.12 | 23.5400-26.2500 | 24.2000 | 23.6000 | 204.87 |
232-DAY | 02-06-2025 | 300.00 | 1,319.38 | 22.8900-24.9900 | 24.6400 | 24.9800 | 1,307.08 |
A comparative analysis of OMO auctions on 28 May and 2 June reveals an increasingly consistent pattern: investors are pulling away from shorter-dated instruments in favour of longer maturities.
On 28 May, the CBN offered ₦300 billion each for 104-day and 139-day bills. The shorter instrument was a clear miss, receiving just ₦85 billion in bids, with only ₦1 billion allotted. In contrast, the 139-day bill was oversubscribed at ₦602.13 billion, with ₦481.33 billion allotted at a stop rate of 24.98%, reflecting strong market conviction around the longer-dated paper.
By 2 June, this trend had intensified. Subscriptions for the 232-day bill dwarfed those of the shorter 106-day bill, while stop rates remained elevated. The spread between the two auctions signals rising investor appetite for locking in yields, possibly anticipating a decline of interest rates in the medium term or simply reacting to the prevailing inflationary climate and broader monetary uncertainty.
Meanwhile, at the Nigerian Treasury Bills (NTB) Primary Market Auction (PMA) conducted on Wednesday, 4 June, 2025, the CBN repriced yields downward, especially on the 91-day and 364-day tenors, likely in response to aggressive bidding. Market participants were surprised to see bids range from as low as 9.4400%-23.0100% for the 364-day tenor.
The auction witnessed intense demand, with total subscriptions exceeding ₦1.3 trillion against a ₦450 billion offer. As usual, the 364-day bill saw the lion’s share of interest, receiving ₦1.21 trillion in bids against a ₦350 billion offer. The CBN eventually allotted ₦369.97 billion, reducing the stop rate by 21 basis points, from 19.56% to 19.35%.
The 182-day tenor, on the other hand, was significantly undersubscribed. With ₦100 billion on offer, only ₦30.03 billion was received and fully allotted at an unchanged stop rate of 18.50%. The 91-day bill attracted ₦70.91 billion in bids against a ₦50 billion offer, leading the CBN to slightly trim the stop rate to 17.98% from 18.00%.
The subdued demand for shorter maturities suggests investor scepticism regarding near-term yield movement and monetary policy clarity. Preference continues to tilt towards longer-term instruments that offer more attractive returns amid a high-interest rate environment.
AUCTION DATE | 04-06-2025 | 04-06-2025 | 04-06-2025 |
ALLOTMENT DATE | 05-06-2025 | 05-06-2025 | 05-06-2025 |
MATURITY DATE | 04-09-2025 | 04-12-2025 | 04-06-2026 |
TENOR | 91-DAY | 182-DAY | 364-DAY |
OFFER (₦) | 50,000,000,000 | 100,000,000,000 | 350,000,000,000 |
SUBSCRIPTION (₦) | 70,914,949,000 | 30,031,586,000 | 1,208,057,392,000 |
ALLOTMENT (₦) | 50,000,000,000 | 30,031,586,000 | 369,968,414,000 |
STOP RATES (%) | 17.9800 | 18.5000 | 19.3500 |
PREVIOUS STOP RATES (%) | 18.0000 | 18.5000 | 19.5600 |
Nigeria’s economic outlook is entering a decisive phase, dictated by deliberate monetary and fiscal policy interventions. Strategic recalibration is a common theme across financial markets and public sector initiatives.
The Central Bank of Nigeria (CBN), in concert with fiscal authorities, is fine-tuning its mechanisms to manage liquidity pressures, anchor inflation expectations, and signal macroeconomic stability to both local and international investors. The rise in high-yield Open Market Operations (OMO) auctions reflects the CBN’s tactical effort to tighten excess liquidity while defending the naira and attracting portfolio inflows.
Simultaneously, government-led initiatives, including targeted MSME financing schemes and infrastructure investments, are geared towards boosting productivity and domestic capacity.
There is also a renewed emphasis on market-driven reforms across sectors, whether in foreign exchange, energy pricing and debt strategy. These efforts aim to restore investor confidence and reinforce policy credibility. The expected continuation of a disciplined interest rate environment, gradual disinflation, and improved FX inflows through autonomous channels signal a forward-leaning posture.
In the global arena, oil prices rebounded amid renewed optimism following resumed trade talks between US President Donald Trump and China’s President Xi Jinping, raising hopes for stronger global demand. Sentiment was further lifted by news that Canada had also entered direct trade discussions with the US. Despite the gains, the oil market remains volatile amid geopolitical tensions, including potential increased US sanctions on Venezuela and the threat of Israeli strikes on Iranian infrastructure.
