CBN mops up N3.46trn, keeps Treasury Bills rates steady despite

The Central Bank of Nigeria (CBN) has intensified liquidity management operations, absorbing N3.46 trillion through Open Market Operations (OMO) and Treasury Bills auctions conducted on November 3 and 4, 2026, amid investor subscriptions of N5.57 trillion, more than twice the combined N2.30 trillion offered.

The aggressive mop-up, driven largely by a N2.95 trillion OMO allotment, signals renewed efforts by the apex bank to contain excess liquidity in the banking system, even as it maintained Treasury Bills stop rates across all three tenors despite strong investor demand.

Results published by the CBN showed that the OMO auction accounted for N2.95 trillion, representing 85.3 per cent of the combined allotments, while the Treasury Bills auction raised N509.41 billion.

At the November 3 OMO auction, investors submitted N3.52 trillion in bids against an offer of N1.50 trillion, translating into a subscription level of 2.35 times the amount on offer.

Demand was heavily concentrated in the 133-day instrument, which attracted N2.36 trillion, accounting for approximately 67 per cent of total OMO subscriptions.

The apex bank allotted securities at stop rates of 17.77 per cent, 17.71 per cent and 17.67 per cent for the 119-day, 126-day and 133-day instruments, respectively.

At the November 4 Treasury Bills auction, subscriptions reached N2.045 trillion against an offer of N800 billion, representing a bid-to-offer ratio of 2.56 times.

However, the CBN allotted only N509.41 billion, equivalent to 63.7 per cent of the advertised offer, leaving approximately N1.54 trillion in investor bids unallotted.

The 364-day instrument dominated demand, attracting N1.994 trillion in subscriptions, although the CBN accepted N461.84 billion.

The 91-day bill attracted N25.01 billion in bids, with N22.40 billion allotted, while the 182-day instrument recorded N25.83 billion in subscriptions and N25.17 billion in allotments.

The latest Treasury Bills sale represented a significant increase from the N71.16 billion allotted at the October 28 auction, when the apex bank rejected most investor bids.

Despite the substantial demand, the CBN retained Treasury Bills stop rates at 15.40 per cent for the 91-day instrument, 15.79 per cent for the 182-day bill and 15.80 per cent for the 364-day maturity, matching the rates recorded at the preceding auction.

Investor appetite for longer-dated securities remained particularly strong, with bids for the 364-day instrument reaching as high as 18.18 per cent, significantly above the accepted stop rate of 15.80 per cent.

The disparity between primary and secondary market pricing also widened, with average secondary-market Treasury Bills yields rising by approximately 43 basis points to 17.70 per cent on November 3, from 17.28 per cent on October 28.

The three-month benchmark yield increased by 130 basis points to 17.40 per cent, while the six-month benchmark advanced by 122 basis points to 17.85 per cent.

The 126-day OMO stop rate of 17.71 per cent also exceeded the 182-day Treasury Bills stop rate of 15.79 per cent by 192 basis points, highlighting the premium investors are demanding across different short-term government securities.

The latest intervention marks a significant turnaround in the CBN’s liquidity absorption strategy following a sharp reduction in OMO allotments at the end of October.

At the October 29 OMO auction, the apex bank allotted just N244.93 billion despite receiving subscriptions of N2.28 trillion, indicating a considerably more conservative approach to liquidity withdrawal at the time.

The renewed mop-up comes against the backdrop of substantial excess liquidity in the banking system, with CBN financial data showing balances above N7.72 trillion in the Standing Deposit Facility (SDF) on November 3.

It also followed the settlement of approximately N2.016 trillion in OMO maturities, partly offset by the N2.95 trillion raised through the latest OMO issuance.

The CBN’s aggressive liquidity management is consistent with its broader monetary tightening efforts, particularly its attempts to prevent excess cash in the financial system from undermining inflation management and exchange rate stability.

In September, the apex bank sold N17.51 trillion in OMO securities against maturities of N10.89 trillion, resulting in a net liquidity withdrawal of approximately N6.62 trillion.

At its September 29 auction alone, the CBN allotted about N4.69 trillion against an advertised offer of N2.50 trillion, underscoring the scale of its intervention in the money market.

Similarly, OMO allotments reached N2.63 trillion at the October 22 auction, exceeding the initial N2 trillion offer before declining sharply at the end of the month.

However, banking system liquidity recovered strongly in October, with the Financial Markets Dealers Association (FMDA) reporting a 56.75 per cent increase to N7.373 trillion as the pace of OMO absorption moderated.

The association has also projected approximately N13.79 trillion in liquidity inflows in November, driven largely by OMO maturities, government allocations and Treasury Bills repayments.

The projected inflows could complicate the CBN’s liquidity management efforts, particularly if the apex bank seeks to sustain elevated short-term interest rates without triggering further pressure on government borrowing costs.