OMO sales hit N5.63 trillion in two weeks as 126-day bill draws oversubscription

Nigeria’s fixed income market saw a surge of investor activity as the Central Bank of Nigeria (CBN) recorded a staggering N5.63 trillion in Open Market Operations (OMO) sales within just two weeks in May 2026. The auctions, conducted between May 4 and May 12, reflected intense appetite from investors for high-yield government securities despite tightening monetary conditions.

During the three auction sessions, the CBN offered about N1.8 trillion worth of instruments but ended up allotting more than three times that amount due to overwhelming demand. Analysts say this reflects sustained liquidity in the financial system and a strong preference for short- to long-term OMO bills as safe, yield-bearing assets.

The standout moment of the period came from the 126-day bill, which attracted exceptional interest from institutional investors. Although only N200 billion was initially offered, subscriptions and allocations surged dramatically, making it the most heavily demanded instrument of the entire period. The trend reinforces a growing shift toward longer-dated securities as investors lock in attractive yields in a volatile rate environment.

Across the three auctions, stop rates remained relatively stable, ranging between 19.97% and 21.90%, while total repayments of N4.78 trillion were recorded within the same period. Despite these large injections and withdrawals, liquidity in the banking system remained high, with the Standing Deposit Facility consistently above N4.5 trillion, signaling persistent excess cash in the financial system.

Overall, the May OMO results highlight the CBN’s continued aggressive liquidity management strategy in 2026. While the sustained mop-up operations help control inflation and stabilize the naira, analysts warn that prolonged reliance on high-interest OMO instruments could raise borrowing costs and potentially slow credit expansion to the real economy.

source: nairametrics