CBN eyes N6.3tn bank liquidity with N2tn OMO offer

Politics Spice Special Features Education Sex & Relationship Interview Columns Opinion Advertise with us CBN eyes N6.3tn bank liquidity with N2tn OMO offer Money October 23, 2026 12:02 am Central Bank of Nigeria building. Photo: CBN

The Central Bank of Nigeria has offered N2tn in Open Market Operations bills as it seeks to absorb excess funds from the banking system, where liquidity surged to N6.283tn in the week ended 16 October.

The offer comes after banking system liquidity jumped by 69.39 per cent from N3.709tn in the preceding week, according to data from the Financial Markets Dealers Association.

The CBN announced the N2tn offer for Thursday, 22 October, comprising N1tn each of 138-day and 180-day bills.

The auction is part of the apex bank’s liquidity management operations, which involve selling securities to financial institutions to withdraw surplus funds from circulation.

The increase in liquidity followed substantial repayments on maturing securities, including approximately N2.41tn in OMO bills on 13 October. Banks’ net placements at the CBN’s Standing Deposit Facility subsequently remained above N6tn through 16 October.

The facility allows eligible financial institutions to deposit excess funds with the apex bank and earn interest, making the volume of placements an indicator of surplus liquidity in the banking system.

According to the FMDA, OMO bills worth N2.067tn were expected to mature during the week beginning 19 October.

The CBN’s latest N2tn offer is equivalent to about 96.8 per cent of the projected maturities. However, the amount of liquidity ultimately withdrawn will depend on the volume of bills the apex bank sells and its final allotment.

The 138-day instrument is scheduled to mature on 9 March, 2027, while the 180-day bill will mature on 20 April, 2027.

The auction follows the CBN’s 6 October OMO sale, when it allotted approximately N3.31tn against an initial offer of N2tn. Subscriptions reached N3.51tn, showing that the apex bank can accept bids above its announced offer.

At that auction, the CBN accepted yields of 17.22 per cent on the 147-day bill and 16.92 per cent on the 182-day instrument, both lower than the rates recorded at the 29 September auction.

The latest auction will therefore offer an indication of how much liquidity the CBN is prepared to absorb and the yields investors are willing to accept.

In September, the apex bank sold N17.51tn in OMO bills against maturities of N10.89tn, resulting in a net liquidity withdrawal of approximately N6.62tn.

The latest N2tn offer suggests that the CBN is continuing to use OMO securities to manage surplus funds in the banking system following the recent increase in liquidity.

However, the announced offer does not automatically translate into an equivalent reduction in banking system liquidity. The final allotment, together with any other liquidity flows during the period, will determine the net impact of the auction.

The outcome will also show whether demand for short- and medium-term CBN securities remains strong and whether accepted yields continue their recent downward trend.

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