CBN repays N2.97 trillion OMO bills after N2.5 trillion auction on Monday
By Aboki Forex —
The Central Bank of Nigeria (CBN) repaid N2.97 trillion in Open Market Operations (OMO) bills maturities on Tuesday, a day after conducting auctions where it allotted N2.54 trillion across three tenors. This net liquidity injection of about N447 billion into the banking system came from repaying N2.987 trillion while simultaneously sterilising N2.54 trillion through fresh OMO issuances on July 13, 2026.
Massive oversubscription at July auction
At the July 13 OMO auction, the CBN offered N200 billion each across three tenors: 8-day, 99-day and 127-day OMO bills. The total offer size was N600 billion. Total subscriptions came in at approximately N2.55 trillion, more than four times the amount on offer. The 8-day OMO attracted subscriptions of N229.58 billion, with N228.90 billion allotted at a stop rate of 21.89%. The 99-day OMO drew N462.18 billion in bids and was fully allotted at a stop rate of 20.49%. The 127-day OMO recorded subscriptions of N1.854 trillion, also fully allotted, clearing at a stop rate of 20.17%. This tenor accounted for about 73% of total demand.
The CBN also settled N17.05 billion in primary market repayment, bringing total repayments to N2.987 trillion between Monday and Tuesday.
July auction shows shift from June
The July 13 auction shows a clear shift in investor preference compared with the CBN's late-June OMO auctions held on June 30. At that sale, total subscriptions across three tenors, 7-day, 22-day and 161-day, stood at about N1.77 trillion against N900 billion offered. Demand in July nearly rose 44% from June's N1.77 trillion, despite the offer size shrinking to N600 billion from N900 billion. This suggests stronger system liquidity heading into mid-July.
The concentration of demand also intensified. In June, the 161-day paper absorbed 67% of total subscriptions at N1.184 trillion, with a stop rate of 19.80%. In July, that concentration deepened further, with the 127-day paper pulling in 73% of subscriptions at a slightly higher stop rate of 20.17%. Notably, the 22-day tenor in June was undersubscribed, drawing only N174 billion against N300 billion offered. This was a sign investors were avoiding mid-length papers in favour of either very short liquidity plays or long-dated yield locks. The July auction reinforced this pattern, as the short 8-day tenor drew comparatively modest demand of N229.58 billion, well behind the longer-dated instrument.
What this means for the naira and investors
OMO bills are short-term instruments used by the CBN to manage banking system liquidity and influence short-term interest rates. The apex bank absorbed about N4.74 trillion in its aggressive liquidity sterilisation campaign into the final weeks of June 2026. Across July and June auctions, investors appear willing to accept lower returns in exchange for locking down yields for longer tenor. As in previous auctions, yields on all maturities continued to decline as maturities lengthened, from 21.89% on the 8-day paper to 20.17% on the 127-day paper. The consistent oversubscription across all auctions confirms banks and institutional investors continue to view CBN OMO instruments as attractive, risk-free options within Nigeria's current high-liquidity environment.