CBN Mops Up N6.62T Net Liquidity in September OMOs

The Central Bank of Nigeria (CBN) actively managed banking system liquidity through Open Market Operations (OMO) in September 2026. The apex bank conducted multiple auctions to sell fresh securities while simultaneously repaying maturing OMO bills. This dual activity aimed to absorb excess funds from the financial system.

The CBN executed five major OMO auctions throughout September, specifically on the 1st, 8th, 16th, 24th, and 29th, allotting a combined N17.51 trillion. Over the same period, five batches of previously issued OMO securities matured, leading to significant repayments of approximately N10.89 trillion to investors. This process involved replacing maturing instruments with new ones, illustrating the apex bank's strategy of managing liquidity through recycling rather than solely outright absorption.

During September, the CBN sold approximately N17.51 trillion in OMO bills, which was about 2.7 times the cumulative N6.4 trillion initially offered. Concurrently, about N10.89 trillion in maturing bills was repaid to the financial system. This resulted in a net liquidity withdrawal of roughly N6.62 trillion for the month, representing about 38% of the total amount sold.

These OMO activities are crucial for the CBN to manage excess liquidity in the banking system and influence short-term interest rates. The operations also showed a growing preference for longer-dated OMO instruments, pushing some repayments into 2027 and reducing near-term liquidity injections. Investor demand remained strong for these securities, even as stop rates on longer-tenor instruments declined by about 170 basis points, from 18.99% to 17.29%.

The net absorption of liquidity varied considerably across September, with the largest withdrawals occurring around the first and final auctions. For instance, the September 1 auction and September 7 maturity produced a net absorption of about N2.82 trillion. An inconsistency was noted in the September 16 data, where the reported N3.292 trillion allotment exceeded total subscriptions of N3.034 trillion for that auction. Despite the aggressive OMO activity, more than N6.2 trillion remained at the CBN’s Standing Deposit Facility as of September 29, pointing to continued liquidity in the banking system.