The Central Bank of Nigeria (CBN) is set to roll out fresh Open Market Operations (OMO) to manage a substantial N784 billion entering the banking system this week. This influx of liquidity is a result of upcoming maturities from OMO bills (N459.60 billion) due today and Nigerian Treasury Bills (NTB) (N324.41 billion) maturing on Thursday.
The CBN uses OMO as a key monetary policy tool to control the money supply and curb inflationary pressures. By selling OMO bills, the central bank effectively borrows money from banks and investors, reducing the amount of cash in circulation. This aggressive approach is part of a broader strategy by CBN Governor Olayemi Cardoso to tighten liquidity.
The move to absorb this liquidity comes after a week where system liquidity improved significantly, reaching N1.40 trillion due to Federation Account Allocation Committee (FAAC) disbursements and OMO maturities. As a result, interbank rates had eased, with the Open Repo Rate (OPR) and Overnight (OVN) declining to 26.50% and 26.95%, respectively.
Economists like Ayodele Akinwunmi of United Capital Plc note that the CBN’s use of OMO has been central to managing liquidity and stabilizing prices. He added that the strategy has also been effective in attracting Foreign Portfolio Investments (FPIs), which has boosted the naira and reinforced Nigeria’s appeal to investors.
The scale of these operations has grown dramatically. The CBN has withdrawn N13.35 trillion from the financial system year-to-date as of August 22, 2025, a sharp increase from N7.45 trillion in the same period of 2024. This signals one of the most forceful liquidity-tightening campaigns in recent years, with total OMO sales jumping to N13.5 trillion in 2024 from just N723 billion in 2023.
