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.
Auction and maturity figures show that the CBN consequently absorbed about N1.14 trillion more than it injected, extending the heavy liquidity withdrawals recorded in September.
Despite the maturity inflows, the overnight lending rate increased by 25 basis points to 22.2%, according to Cordros Securities daily market update on Tuesday, while investors submitted N3.511 trillion in bids against the N2 trillion offered at the auction.
The CBN offered N2 trillion split equally between 147-day and 182-day instruments but eventually allotted N3.309 trillion, equivalent to about 165.4% of the amount offered and 94.2% of total subscriptions. Demand was heavily concentrated in the longer instrument.
The bidding pattern indicates that investors preferred locking funds into the longer tenor even though its stop rate was 30 basis points below the shorter instrument.
The October 6 auction extends the CBN’s heavy use of OMO bills to manage liquidity following substantial withdrawals in September. Nairametrics previously reported that the apex bank sold about N17.51 trillion in OMO bills in September, while approximately N10.89 trillion matured, resulting in a net liquidity withdrawal of roughly N6.62 trillion across five auctions.
The latest auction therefore extends the pattern of substantial liquidity sterilisation even as OMO rates continue their gradual decline.
The increase in the overnight lending rate to 22.2% suggests that liquidity withdrawals are tightening conditions at the margin despite funds returning through OMO maturities. However, recent system-liquidity indicators also show that substantial surplus funds have remained within the banking system.
The Monetary Policy Committee reduced the Monetary Policy Rate by 350 basis points to 23% on September 22, while the CBN has continued using OMO auctions to withdraw surplus liquidity.
The combination of lower policy rates and persistent OMO sterilisation therefore shows the CBN easing its benchmark rate while continuing to manage the volume of surplus liquidity circulating through the financial system.
