The Central Bank of Nigeria (CBN) intensified its liquidity management efforts on Wednesday with the issuance of ₦600 billion worth of Open Market Operation (OMO) bills, targeted at reducing surplus cash within the banking system.
With system liquidity exceeding ₦5 trillion, analysts had projected that both the midweek OMO and Treasury Bill auctions would attract substantial market participation. The latest auction validated these expectations.
The intervention aligns with the Apex Bank’s plan to curtail excess liquidity that could heighten inflationary pressures or weaken monetary policy transmission.
OMO bills were made available exclusively to eligible investors, including foreign portfolio participants and deposit banks, in two different maturities—174 days and 188 days. Both instruments were heavily oversubscribed.
At the end of the exercise, the CBN allotted ₦903.4 billion across the two maturities at stop rates of 20.45% and 20.54%, respectively. Despite the uptick in rates, the average yield across OMO bills settled at 16.95%.
Following the auction, Nigerian interbank rates surged across all tenors. The overnight lending rate climbed by six basis points to 24.88%, reflecting tighter liquidity conditions after the CBN absorbed excess funds through the OMO sale.
A report by MarketForces Africa indicated that system liquidity had rebounded strongly the previous day, rising by 40.26% to ₦5.47 trillion from ₦3.90 trillion, driven primarily by a ₦1.36 trillion OMO repayment.
 intensified its liquidity management efforts on Wednesday with the issuance of ₦600 billion worth of Open Market Operation (OMO) bills, targeted at reducing surplus cash within the banking system.){kind=link}