CEEMEA Emerging Markets Strategy: Rolling the Nigeria short-dated OMO

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CEEMEA Emerging Markets Strategy: Rolling the Nigeria short-dated OMO

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01 Jul 2026 12:10:51 ET │ 13 pages

CEEMEA Emerging Markets Strategy

Rolling the Nigeria short-dated OMO

CITI'S TAKE

Katie Kironde AC

We are rolling the short-dated Nigeria OMO and providing an update on our +44-20-7986-3315

Q3 strategy views. katie.kironde@citi.com

Luis E Costa, CFA ACWe are rolling our Nigeria OMO. The short-dated OMO (3M short-dated tenor; 30

June 2026; ISIN: NGO2F3006260) we opened has matured. We went into the trade +44-20-7986-9757

at a discount yield of 19.9% (21.0 % simple yield) and a spot of USDNGN1385. The luis.costa@citi.com

PnL is +6.22% at a spot of USDNGN1370 (+USD527k or 0.53% of our portfolio). We

go long the 3rd November 2026 OMO (ISIN: NGO5H0311266) at a discount of

20.00% or simple yield (21.47%) at FX of 1370. Trade priced as at 3:00pm BST, 01 July

2026.

Nigeria remains high-conviction for us, driven by elevated oil prices that have

exceeded our initial forecasts. This favorable oil environment is translating into

stronger government revenues, improved reserve accumulation, and reduced fiscal

borrowing pressures. The Central Bank of Nigeria has demonstrated maturity in its

market management approach, particularly evident in how it handled recent

conflict-related shocks by allowing the Naira to adjust in measured steps before

intervening, rather than defending a particular level and depleting reserves. This

strategic shift has resulted in a significant reduction in FX intervention, reflecting a

structural transition towards genuine flow-driven trading.

The monetary policy landscape shows CBN firmly committed to consolidation

mode - prioritizing single-digit inflation achievement over rate cuts. A realistic