The Central Bank of Nigeria (CBN) has stepped up liquidity management, withdrawing N3.31 trillion from the banking system through its latest Open Market Operations (OMO) auction even as the naira strengthened to N1,331.50 per dollar.
The October 6 OMO auction came against N2.17 trillion in maturing OMO bills that flowed back into the banking system, leaving the apex bank with a net liquidity withdrawal of about N1.14 trillion.
The CBN had offered N2 trillion in 147-day and 182-day bills but allotted N3.309 trillion after investors submitted N3.511 trillion in bids. The 182-day instrument attracted the stronger demand, receiving N2.693 trillion in subscriptions against N1 trillion offered and clearing at 16.92%.
The 147-day bill, meanwhile, attracted N817.95 billion in bids against N1 trillion on offer, with N637.20 billion allotted at a stop rate of 17.22%. Both rates were marginally lower than those recorded at the September 29 auction.
The latest operation extends the CBN’s aggressive liquidity sterilisation programme. In September, the apex bank sold about N17.51 trillion in OMO bills against N10.89 trillion in maturities, resulting in a net withdrawal of roughly N6.62 trillion.
Despite the liquidity tightening, the naira continued to trade within a narrow range around N1,330/$ at the Nigerian Foreign Exchange Market (NFEM). The currency closed at N1,331.50/$ on October 6, gaining N1.40 from N1,332.90/$ the previous day.
FX market activity, however, remained volatile. NFEM turnover rose to $619.22 million from 287 deals on October 5, up from $569.80 million recorded from 249 deals on October 2. The CBN had yet to publish the October 6 turnover figure at the time of reporting.
The naira’s relative stability comes after the CBN cut its Monetary Policy Rate by 350 basis points to 23% in September, while Nigeria’s foreign reserves have continued to strengthen. The World Bank has also raised its forecast for Nigeria’s 2026 economic growth to 4.3%.
The latest developments suggest the CBN is pursuing a dual approach of lowering its benchmark interest rate while using OMO operations to absorb excess liquidity, as it seeks to maintain monetary and foreign-exchange stability.
