The Central Bank of Nigeria (CBN) sold roughly N12.82 trillion through four Open Market Operations auctions last month of September 2022, after attracting tenders worth N20.58 trillion.
The huge demand came despite the apex bank putting up for sale only N3.9 trillion, indicating strong appetite for the short term instruments CBN uses to mop up liquidity in the system.
The News Chronicle reports that the September auctions were conducted on September 1, 8, 16 and 24 and demand exceeded supply at each auction.
The September 24 auction registered the highest subscription to offer ratio with N5.74 trillion bids for N900 billion on offer. CBN finally allocated N2.26 trillion.
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However, yields dropped during the month with rates on longer dated instruments falling from about 18.99 percent at the start of September to 17.29 percent by the final auction.
The decline came soon after the Monetary Policy Committee slashed the benchmark interest rate by 350 basis points to 23 percent.
Despite the lower rates, demand surged with September registering the highest monthly OMO subscriptions so far this year.
The development highlights the CBN’s continued aggressive approach to managing excess liquidity as it prepares for another round of auctions in October.
