CBN withdraws N3.31 trillion via OMO as N2.17 trillion maturities hit banking system

The Central Bank of Nigeria (CBN) withdrew about N3.31 trillion from the banking system at its October 6, 2026 Open Market Operations (OMO) auction, while approximately N2.17 trillion in maturing OMO bills flowed back into the system.

Auction and maturity figures show that the CBN consequently absorbed about N1.14 trillion more than it injected, extending the heavy liquidity withdrawals recorded in September.

Despite the maturity inflows, the overnight lending rate increased by 25 basis points to 22.2%, according to Cordros Securities daily market update on Tuesday, while investors submitted N3.511 trillion in bids against the N2 trillion offered at the auction.

182-Day Bill dominates OMO sales:

The CBN offered N2 trillion split equally between 147-day and 182-day instruments but eventually allotted N3.309 trillion, equivalent to about 165.4% of the amount offered and 94.2% of total subscriptions. Demand was heavily concentrated in the longer instrument.

• The 182-day bill accounted for about 80.7% of the total amount sold despite clearing at a lower rate than the shorter paper.
• Investors submitted N2.693 trillion in bids for the 182-day bill against N1 trillion offered, representing subscription of about 2.69 times, while the CBN allotted N2.671 trillion.
• The 182-day instrument therefore received an allotment equivalent to 99.2% of bids and cleared at 16.92%, with maturity scheduled for April 6, 2027.
• The 147-day bill attracted N817.95 billion against N1 trillion offered, leaving it 81.8% subscribed, while the CBN allotted N637.20 billion at a 17.22% stop rate.
• Both stop rates declined by two basis points from September 29, when the comparable 147-day and 182-day instruments cleared at 17.24% and 16.94%, respectively.

The bidding pattern indicates that investors preferred locking funds into the longer tenor even though its stop rate was 30 basis points below the shorter instrument.

CBN sustains heavy liquidity withdrawals:

The October 6 auction extends the CBN’s heavy use of OMO bills to manage liquidity following substantial withdrawals in September. Nairametrics previously reported that the apex bank sold about N17.51 trillion in OMO bills in September, while approximately N10.89 trillion matured, resulting in a net liquidity withdrawal of roughly N6.62 trillion across five auctions.

• The September 29 auction produced the largest single net withdrawal during the month, with N4.686 trillion sold against N2.433 trillion in same-day maturities.
• October 6 OMO sales were about 29.4% below the N4.686 trillion allotted on September 29, although the earlier auction included a 266-day instrument that attracted N4.543 trillion in bids.
• Excluding the 266-day instrument, the CBN sold approximately N1.69 trillion across the 147-day and 182-day papers on September 29, compared with N3.31 trillion across the same tenors on October 6.
• Average OMO yields in the secondary market declined by 6 basis points to 18.7%, while average Treasury bill yields contracted by one basis point to 17.8%, Cordros Securities Limited reported on Tuesday.
• FGN bond yields moved in the opposite direction, rising seven basis points to 15.7%, with selling pressure recorded on the February 2031, February 2034 and September 2036 bonds.

The latest auction therefore extends the pattern of substantial liquidity sterilisation even as OMO rates continue their gradual decline.

CBN balances easing with sterilization:

The increase in the overnight lending rate to 22.2% suggests that liquidity withdrawals are tightening conditions at the margin despite funds returning through OMO maturities. However, recent system-liquidity indicators also show that substantial surplus funds have remained within the banking system.

• Nairametrics previously reported that more than N6.2 trillion was placed at the Standing Deposit Facility on September 29, while estimated net system liquidity stood at N8.57 trillion that week.
• The October 6 auction withdrew approximately N1.14 trillion on a net basis after accounting for about N2.17 trillion in OMO maturities.
• Strong demand for the 182-day bill allows the CBN to push a larger portion of subsequent repayments into April 2027.
• The undersubscription of the 147-day instrument contrasts with the heavy demand for the longer tenor, despite the latter offering a slightly lower stop rate.

The Monetary Policy Committee reduced the Monetary Policy Rate by 350 basis points to 23% on September 22, while the CBN has continued using OMO auctions to withdraw surplus liquidity.

The combination of lower policy rates and persistent OMO sterilisation therefore shows the CBN easing its benchmark rate while continuing to manage the volume of surplus liquidity circulating through the financial system.