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. The post CBN withdraws N3.31 trillion via OMO as N2.17 trillion maturities hit banking system appeared first on Nairametrics .
On October 6, 2026, the Central Bank of Nigeria (CBN) drew out approximately N3.31 trillion from the banking system via Open Market Operations (OMO). Concurrently, around N2.17 trillion in OMO bills were maturing and returning to the system. This left the CBN with a net absorption of about N1.14 trillion, continuing the pattern of significant liquidity withdrawals observed in September.
Despite the inflow of maturing bills, the overnight lending rate rose by 25 basis points to 22.2%, according to the Cordros Securities daily market update. At the auction, investors submitted N3.511 trillion in bids for N2 trillion offered in N147-day and N182-day instruments. However, the CBN allocated N3.309 trillion, or about 165.4% of the offered amount, representing 94.2% of total subscriptions.
This demand largely favored the longer tenor, despite its 30 basis point lower stop rate compared to the shorter instrument. This auction marks the CBN's continued heavy reliance on OMO bills to control liquidity following substantial withdrawals in September. In September, the bank had sold N17.51 trillion in OMO bills, with roughly N10.89 trillion maturing, leading to a net liquidity withdrawal of about N6.62 trillion across five auctions.
The latest auction extends this trend of substantial liquidity sterilization, even as OMO rates gradually decline. An increase in the overnight lending rate to 22.2% suggests that the liquidity withdrawals are tightening conditions at the margin, even though funds are returning through OMO maturities. Nevertheless, recent system-liquidity indicators indicate that large surplus funds have remained within the banking system.
The Monetary Policy Committee had already reduced the Monetary Policy Rate by 350 basis points to 23% on September 22. The CBN has continued utilizing OMO auctions to manage the surplus liquidity circulating through the financial system, demonstrating a policy of lowering the benchmark rate while simultaneously sterilizing surplus liquidity.
Written by urgent.news from Nairametrics's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
