CBN allots N12.823 trillion as investors pour N20.58 trillion in September OMO auctions against N3.9 trillion offer

The Central Bank of Nigeria (CBN) recently allocated N12.823 trillion through four Open Market Operations (OMO) auctions in September 2026, despite only offering N3.9 trillion. This comes after investors submitted a combined N20.58 trillion in bids, representing a demand of approximately 5.28 times the amount offered. The CBN's analysis of the September OMO auction results, spanning September 1, 8, 16, and 24, reveals a strong investor appetite throughout the month, even as interest rates showed a significant downward shift.

The most striking trend was the decline in stop rates, with longer-term instruments witnessing a 170 basis point reduction over the month. Cumulatively, investors' subscriptions reached N20.58 trillion against the offered N3.9 trillion, showcasing a demand of around 5.28 times the amount on offer. In total, successful allotments amounted to approximately N12.823 trillion, equivalent to about 3.29 times the total amount offered and 62.3% of the cumulative investor bids.

The sharpest pricing trend was observed in the CBN's longer-term instruments, which saw their rates drop from 18.99% at the start of the month to 17.29% by the final auction. Investor demand was notably concentrated in these longer-dated securities, even as their rates declined. The decline in rates coincided with the Monetary Policy Committee's decision to cut the benchmark rate by 350 basis points to 23% during the September 22 meeting.

Despite the falling rates, investor demand remained robust, with the N20.58 trillion in OMO subscriptions for September marking the highest level recorded so far in 2026. This month's OMO activity is part of a broader pattern of heavy subscriptions to the CBN's OMO and Treasury Bills auctions throughout 2026. The cumulative N20.96 trillion taken out by the apex bank through OMO and Treasury Bills auctions in September alone underscores the sustained investor interest.

With rates expected to fall further into October and demand still exceeding stated offers, future OMO and NTB auctions will determine whether the lower-rate environment translates into a moderation in investor appetite for the CBN's liquidity-mop-up instruments.