CBN Raises N1.053 Trillion in Government Securities Sale

The Central Bank of Nigeria (CBN) has concluded the sale of government securities, raising a total of N1.053 trillion (equivalent to $680 million) in short-term instruments. The sale, part of the bank’s liquidity management exercise, saw overwhelming demand, with the apex bank’s N500 billion offer at the Open Market Operations (OMO) auction being oversubscribed.

In a statement issued by the CBN’s Acting Director of the Corporate Communications Department, Mrs. Hakama Sidi-Ali, it was revealed that 79 percent of the total bids came from foreign investors, indicating strong confidence in the Nigerian market. This auction marks the first since the recent Monetary Policy Committee (MPC) meeting, where strategies to curb inflation, stabilize the exchange rate, and boost confidence in the banking system and economy were discussed.

During the MPC meeting and a subsequent virtual meeting with foreign portfolio investors, CBN Governor Olayemi Cardoso outlined detailed strategies aimed at achieving these objectives. The bank’s efforts to address inflationary pressures and enhance market stability have begun yielding positive results, as evidenced by the significant investor confidence demonstrated in the recent securities sale.

Cardoso emphasized the outlook for sustained growth in the CBN’s foreign currency reserves, providing assurance to investors of improved liquidity in the foreign exchange market and the imminent settlement of remaining backlog transactions. “The CBN is committed to supporting price stability by increasing liquidity in the foreign exchange markets sustainably. Our focus is on building a fully functioning market that allows smooth entry and exit for investors,” Cardoso stated.

The successful government securities sale reflects growing investor confidence in Nigeria’s economic prospects and the effectiveness of the CBN’s monetary policy measures. With foreign investors showing strong interest in Nigerian assets, the country is poised to attract more foreign capital inflows, which will support economic growth and stability.

Market analysts have welcomed the news, noting that the oversubscription of the OMO auction indicates positive sentiment towards Nigerian financial assets. They anticipate that continued implementation of prudent monetary policies by the CBN will further bolster investor confidence and contribute to the country’s economic recovery.

The CBN’s proactive approach to liquidity management and commitment to market stability have been praised by stakeholders, who view these efforts as essential for sustaining economic growth and attracting investment. As Nigeria continues to navigate through economic challenges, the central bank’s role in maintaining stability and fostering confidence remains crucial.

Looking ahead, the CBN is expected to maintain its focus on implementing measures that promote price stability, enhance liquidity, and support sustainable economic growth. With a clear strategy in place, backed by strong investor confidence, Nigeria is well-positioned to overcome current challenges and achieve long-term prosperity.