The Central Bank of Nigeria is holding an Open Market Operations (OMO) auction today aimed at selling ₦1.5 trillion, as cash in the banking system remains elevated and another large wave of maturities is due this week.
The offer is split evenly into three tenors: ₦500 billion each of 154-day, 252-day and 329-day bills. It is the third OMO sale between 3 and 10 November, as the apex bank steps up efforts to mop up excess liquidity. Banks had ₦5.915 trillion parked at the CBN’s Standing Deposit Facility on 9 November, after a higher ₦8.311 trillion on 6 November following earlier OMO settlements.
Liquidity Still High Despite Recent Sales
According to the Financial Markets Dealers Association (FMDA) weekly report published on 9 November, banking-system liquidity rose 15.36% week-on-week to ₦8.505 trillion as of 6 November, from ₦7.373 trillion the week before.
FMDA expects about ₦2.448 trillion to flow into the system this week slightly less than the previous week’s ₦2.610 trillion, but still substantial. Almost all of it is from maturing OMO bills: about ₦2.298 trillion, or roughly 94% of the total. Treasury bill maturities are projected at about ₦148.6 billion, with only a small amount from corporate bond coupons. No FAAC distribution or major FGN bond maturities are expected in the weekly tally.
Aggressive November OMO Programme
The CBN has already raised about ₦5.667 trillion through OMO auctions on 3 and 6 November close to the ₦6.182 trillion allotted across the whole of October.
On 3 November it offered ₦1.50 trillion, received ₦3.52 trillion in bids and allotted ₦2.95 trillion, with stop rates around 17.67%–17.77%. On 6 November it again offered ₦1.50 trillion, attracted ₦5.74 trillion in subscriptions and allotted ₦2.72 trillion, with stop rates ranging from about 15.74% to 17.25% depending on tenor.
The Debt Management Office has also been selective. At its 4 November Treasury bill auction it allotted only about ₦509 billion against an ₦800 billion offer, despite ₦2.045 trillion in subscriptions. Another ₦800 billion T-bill sale is due on 11 November, settling the next day alongside the projected T-bill maturities.
What It Means for Markets
When large volumes of OMO bills mature, cash returns to banks unless the CBN sells a similar or larger amount of new securities. That is why today’s ₦1.5 trillion offer and any further sales this month will shape whether system liquidity keeps rising or is held in check.
FMDA has projected total November inflows of about ₦13.79 trillion, slightly above October’s estimate, with OMO maturities, FAAC and Treasury bill repayments making up the bulk. How much of that cash stays in the system will depend on the size of fresh OMO allotments and government borrowing.
For banks, elevated liquidity can ease short-term funding pressures but also invites more aggressive central bank sterilisation. For fixed-income investors, the mix of heavy maturities, strong auction demand and selective allotments will continue to influence yields on short- and medium-term naira paper.
