The Central Bank of Nigeria (CBN) has offered N2.5 trillion through a fresh Open Market Operations (OMO) auction as N2.433 trillion in maturing OMO instruments is due for repayment to investors on Tuesday, September 29, 2026.
The near one-for-one transaction comes as the apex bank moves to manage liquidity in the banking system, where banks had placed about N6.278 trillion with the CBN’s Standing Deposit Facility (SDF) as of September 29. The latest figure was up from N6.014 trillion on September 28 and N5.899 trillion on September 25.
Under the auction notice, the CBN is offering N500 billion through a 147-day instrument maturing on February 23, 2027; N1 trillion in 182-day paper maturing on March 30, 2027; and another N1 trillion in 266-day paper maturing on June 22, 2027.
The longer-dated instruments account for N2 trillion, or 80 per cent of the total offer, signalling a substantial extension of the maturity profile of the CBN’s current OMO operations. Bidding for the auction was scheduled to close at 10:30 a.m.
Fresh offer almost matches repayment
The N2.5 trillion offer exceeds the N2.433 trillion repayment by only N66.765 billion, representing about 102.7 per cent of the amount falling due.
However, the full N2.5 trillion will not necessarily be withdrawn from the banking system because the actual liquidity impact will depend on the amount allotted by the CBN at the auction.
The auction is taking place against a backdrop of substantial surplus liquidity. Banks’ SDF placements increased by about N379 billion, or 6.4 per cent, between September 25 and September 29, according to CBN financial-market data.
The development follows a broader liquidity build-up in the financial system. Earlier analysis indicated that N2.43 trillion in OMO maturities, alongside bond coupon payments, could push potential system liquidity significantly higher during the week.
Investors maintain strong appetite for OMO
The latest auction also comes after unusually strong demand for CBN OMO instruments during September.
Across auctions held on September 1, 8, 16 and 24, the CBN offered a combined N3.9 trillion but received about N20.58 trillion in bids and allotted approximately N12.823 trillion.
September’s subscriptions were higher than the N18.72 trillion recorded in August, with the increase coming partly after the CBN expanded OMO participation to individuals, corporates and non-bank financial institutions through deposit money banks.
Despite the strong demand, accepted rates on longer-tenor OMO instruments declined during September, falling from 18.99 per cent at the beginning of the month to 17.29 per cent at the September 24 auction.
CBN extends OMO into 2027
The September 29 auction introduces a 266-day instrument maturing in June 2027, making it the longest OMO tenor offered in the current cycle.
It comes a week after the Monetary Policy Committee reduced the Monetary Policy Rate by 350 basis points from 26.5 per cent to 23 per cent. The CBN described that decision as an operational reset intended to bring the benchmark rate closer to prevailing market rates rather than a straightforward shift to monetary easing.
The apex bank has continued to use OMO sales as a key tool for managing liquidity even as large repayments periodically inject funds into the financial system.
With more than N6.2 trillion already held at the SDF, the outcome of Tuesday’s auction — particularly the eventual allotment and stop rates — will determine how much of the N2.433 trillion repayment is effectively reabsorbed by the CBN and the cost investors accept for locking funds into 2027.
