The Central Bank of Nigeria’s (CBN) recent decision to cut its benchmark interest rate has triggered a sharp increase in investor demand for Open Market Operations (OMO) securities.
Investors submitted N6.09 trillion in bids at the CBN’s September 24, 2026 OMO auction, compared with N3.03 trillion at the September 16 auction. This represents an increase of N3.06 trillion, or about 100.7 percent, in just eight days.
The surge came shortly after the CBN’s Monetary Policy Committee reduced the Monetary Policy Rate (MPR) from 26.5 percent to 23 percent, representing a 350-basis-point reduction. The CBN confirmed the new 23 percent MPR following its September 21–22 meeting.
Despite the strong investor interest, the CBN offered N1 trillion at both the September 16 and September 24 auctions. The increased demand was particularly noticeable among longer-term OMO securities, as investors sought to secure available yields before rates potentially decline further.
The 180-day OMO instrument attracted N3.88 trillion in subscriptions against N450 billion offered. The CBN eventually sold N1.315 trillion at a stop rate of 16.99 percent.
The 152-day instrument also attracted significant interest, receiving N1.86 trillion in bids against N450 billion offered. It was allotted at a stop rate of 17.29 percent.
Meanwhile, the 68-day instrument received N348.58 billion in bids against N100 billion offered, although the CBN did not make any sale on that tenor.
The latest auction also showed a decline in yields compared with the previous auction. For example, the stop rate on the comparable 152-day OMO instrument fell by about 110 basis points, from 18.39 percent on September 16 to 17.29 percent on September 24.
The CBN sold a total of N2.25 trillion in the latest auction, lower than the N2.52 trillion sold during the previous auction. Consequently, about N3.83 trillion worth of investor bids were left unallotted.
Analysts at Coronation Merchant Bank said the market had already begun adjusting to lower interest rates before the MPC decision. They noted that the 364-day Nigerian Treasury Bill stop rate had fallen from 17.59 percent on August 26 to 16.62 percent on September 9.
The Financial Markets Dealers Association also reported increased liquidity in the financial system, with system liquidity rising to N7.45 trillion from N2.86 trillion at the close of the previous week
The developments suggest that investors are adjusting their portfolios following the CBN’s rate cut, while demand for fixed-income securities remains strong. Future movements in OMO and Treasury bill yields will depend on liquidity conditions, the transmission of the new MPR and the CBN’s subsequent monetary-policy operations.
