Central Bank of Nigeria mops up N4.72tn via OMO operations

The Central Bank of Nigeria (CBN) has intensified its Open Market Operations (OMO) to manage excess liquidity in the financial system. In a two-day period, the apex bank absorbed N4.72 trillion from investors, following massive demand for short-term securities that reached N8.62 trillion—more than four times the initial N2 trillion offer.

Investors showed significant interest in longer-duration instruments. For instance, a 132-day instrument saw bids of N3.478 trillion against an initial N500 billion offer, leading the CBN to increase the allotment to N2.183 trillion. Similarly, a 152-day instrument attracted N3.294 trillion in bids, resulting in an allotment of N1.768 trillion. Approximately 79 percent of total investor demand was concentrated in these two longer maturities.

While system liquidity remained relatively high, the aggressive sterilization efforts have begun to influence the market. Although overnight funding rates remained stable, the NIBOR curve showed rising rates for 1-month, 3-month, and 6-month tenors, suggesting that the market is pricing in a tighter funding environment for the medium term.