-
CBN offers ₦2trn in OMO bills, split equally between 138-day and 180-day instruments.
-
Banking system liquidity climbed to ₦6.283trn in the week ended October 16, following substantial OMO repayments.
-
The final allotment and stop rates will determine how much liquidity the auction removes from the financial system.
October 22, (THEWILL) – The Central Bank of Nigeria is offering ₦2 trillion in Open Market Operations bills as banking system liquidity remains elevated, with banks’ net placements at the apex bank’s Standing Deposit Facility exceeding N6tn earlier in October.
The auction, scheduled for Thursday, October 22, comprises ₦1 trillion each in 138-day and 180-day bills, according to the CBN’s notice. Bidding is scheduled between 1 pm and 1:30 pm.
The offer comes as the Financial Markets Dealers Association projects ₦2.067 trillion in OMO maturities for the week beginning October 19, putting the auction size close to the volume of funds expected to return to the financial system.
The ₦2 trillion offer represents approximately 96.8 percent of the projected maturities, leaving a difference of ₦67 billion.
The 138-day instrument is scheduled to mature on March 9, 2027, while the 180-day bill will mature on April 20, 2027.
However, the offer size does not establish how much the CBN will ultimately withdraw. The net liquidity impact will depend on subscriptions, accepted bids, final allotments and the value of maturing securities during the period.
OMO Repayments Lift Banking Liquidity
The auction follows a substantial increase in banking system liquidity after repayments on maturing OMO securities.
Data cited by the Financial Markets Dealers Association showed that banking system liquidity rose by 69.39 percent to ₦6.283 trillion in the week ended October 16, from ₦3.709 trillion in the preceding week.
The increase followed an OMO repayment of approximately ₦2.41 trillion on October 13. Banks’ net placements at the CBN’s Standing Deposit Facility subsequently remained above ₦6 trillion through October 16.
The Standing Deposit Facility allows banks to deposit excess funds with the CBN and earn interest, making it an indicator of surplus liquidity in the banking system.
The latest auction follows the CBN’s October 6 OMO sale, when it allotted approximately ₦3.31 trillion against an initial offer of ₦2 trillion and subscriptions of ₦3.51 trillion.
The allotment exceeded the original offer by about ₦1.31 trillion, illustrating that the CBN can accept bids above its announced offer.
At that auction, stop rates settled at 17.22 percent for the 147-day bill and 16.92 percent for the 182-day instrument, both below the rates recorded at the September 29 auction.
READ ALSO:
Allotment Will Determine Liquidity Withdrawal
The October 22 auction will provide a further indication of the CBN’s approach to managing surplus liquidity through short-term securities.
The two instruments carry maturities of less than six months, allowing the CBN to absorb funds for a defined period while determining the cost at which investors are willing to lend to it.
In September, the apex bank sold approximately ₦17.51 trillion in OMO bills against ₦10.89 trillion in maturities, resulting in a net withdrawal of about ₦6.62 trillion over the period.
The latest offer is therefore significant not only because of its size but also because of the amount ultimately allotted relative to maturing securities.
A full ₦2 trillion allotment would not, by itself, establish a net withdrawal of ₦2 trillion, since the impact must be assessed alongside repayments and other liquidity flows.
The auction results, including subscription levels, stop rates and final allotments, will show the extent to which the CBN absorbs the liquidity returning to the banking system.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
