Govt securities allotments crash 56% to N9.5 trillion as CBN reins in OMO issuance
Nigeria's total government securities allotments plunged 55.86% to N9.501 trillion in October 2026 from N21.527 trillion in September, driven by a sharp 64.69% drop in OMO bills to N6.182 trillion. Treasury Bills allotments also fell 45.86% to N1.309 trillion, while FGN bonds were the only instrument to rise—up 25.70% to N2.010 trillion.
The collapse in bid-to-cover ratios tells the real story: NTB demand dropped to 2.19x from 5.11x, OMO to 1.70x from 3.69x, and FGN bonds to just 1.00x (meaning subscriptions barely matched offers). At the October 28 NTB auction, the DMO rejected N1.84 trillion in bids and allotted only N71.16 billion against N1.908 trillion in subscriptions. The October 14 auction saw 74% of bids unallotted, with the one-year stop rate rising 5 basis points to 15.90%.
Nigeria's 10-year bond yield jumped 40 basis points to 16.63%, defying global trends where US, Japan, UK, South Africa and China yields all fell. The spread over US 10-year Treasuries now stands at 11.70 percentage points. Secondary market turnover dropped 37.19% to N25.754 trillion.
But there's a liquidity flip side: banking-system liquidity surged 56.75% to N7.373 trillion as the CBN net-repaid N2.87 trillion in October (allotting N6.182 trillion OMO against N9.051 trillion maturities), reversing September's N6.62 trillion net withdrawal. Foreign investors still hold over $20 billion in OMO securities.
The naira weakened 0.87% to N1,338.99/$ in the official window despite CBN selling over $3 billion, though the parallel premium narrowed to N40.20 from N64.24 and reserves rose to $55 billion. MPR holds at 23% with the next MPC meeting in November.
If you hold fixed-income positions, rising yields mean mark-to-market losses on existing bonds but better entry points for new money. The CBN's selective duration advice suggests they expect rates to stabilise. Watch the November auctions—they'll signal whether this demand weakness persists or was just October's liquidity recalibration.