CBN mops N1.185tn liquidity via OMO despite N4.3tn repayments, yields near 19.5%
The CBN withdrew N4.72 trillion from banks through OMO auctions on August 26-27, 2026, but N4.3 trillion flowed back via primary market repayments, resulting in a net liquidity withdrawal of approximately N1.185 trillion for the two-day period. Across tenors of 96, 97, 132 and 152 days, the CBN offered N2.0 trillion but attracted N8.62 trillion in subscriptions—over four times the amount on offer—with allotments exceeding the advertised size by more than N2.7 trillion.
Yields showed an inverse relationship with tenor: the 152-day bill cleared at 19.32% (lowest), while the 96-day and 97-day instruments cleared at 19.85% and 19.90% respectively. Strong demand for longer tenors despite lower yields indicates investors preferred locking in returns over extended periods. The Standing Deposit Facility held N3.42 trillion as of August 28, confirming the banking system retained substantial excess liquidity even after the aggressive OMO mop-up.
With OMO bills now accessible to individuals through banks (not just Money Market Dealers), this environment presents a fixed-income option yielding near 19.5% for retail investors. Given the CBN’s pattern of treating OMO as an active sterilisation tool and upcoming Treasury Bills auctions, should you consider allocating funds to these government securities, or do you prefer alternative instruments given the persistent liquidity surplus in the system?