CBN Pulls N2.5trn Out of Banks as OMO Auction Draws N3trn in Bids

The Central Bank of Nigeria absorbed about N2.5 trillion from the financial system at its latest Open Market Operations auction, after investors submitted roughly N3 trillion in bids for bills the apex bank had offered at N1 trillion. The auction held on Wednesday, September 16, 2026.

The huge oversubscription forced the CBN to allot far above its original offer, pulling a substantial amount of naira cash out of circulation. It is the clearest signal yet that the regulator is staying aggressive on liquidity tightening even as the naira remains under pressure.

Investors chase high yields

The CBN offered bills across three maturities of 69 days, 90 days and 153 days. Banks and institutional investors competed hard for the government-backed instruments, with demand running three times the amount on offer.

Stop rates still closed below the 20% mark, pointing to repricing in the fixed-income market. The 69-day bill cleared at 19.25%, the 90-day instrument was allotted at 19.05%, while the 153-day bill cleared at 18.39%.

Market analysts said the heavy subscription reflects continued preference for short-term fixed-income assets amid elevated interest rates and lingering economic uncertainty. Demand was particularly strong for the longer-dated bills, a sign that investors want to lock in attractive returns before rates potentially ease further.

The lower stop rates also suggest investors are willing to accept slightly reduced yields in exchange for the safety and liquidity that CBN-backed securities offer.

Money market stays tight

Liquidity conditions remained tight after the auction. The overnight lending rate edged up by two basis points to 22.20%, while the Open Repo Rate held steady at 22.00%.

Those elevated funding rates show that money market conditions are still firm, even after previous rounds of liquidity management by the apex bank.

By selling OMO bills, the CBN withdraws excess naira liquidity from banks and other investors. That helps it manage money supply, influence short-term interest rates and support broader monetary policy objectives.

Naira still under pressure

The aggressive mop-up has not yet lifted the currency. The naira depreciated to N1,331 per dollar on Thursday, September 17, 2026, against the previous rate of N1,329.

Earlier in the week, the currency weakened at the official market. Data from the CBN showed the naira fell to N1,329.21 per dollar at the Nigerian Foreign Exchange Market, compared with N1,320.25 recorded on Tuesday, as renewed demand for the greenback interrupted its recent rally.

The CBN's latest push is aimed at boosting the naira's strength across all trading platforms, with Nigeria's foreign reserves sitting at a 17-year high.

For businesses and consumers, the message is that borrowing costs will stay high for now. Banks facing tighter liquidity have little room to cut lending rates, and any relief on the naira will depend on how long the CBN keeps draining cash from the system.