The Central Bank of Nigeria (CBN) began the 2026 monetary year with strong investor appetite at its first Open Market Operations (OMO) auctions, attracting total subscriptions of ₦2.727 trillion across two medium-term tenors.
Results of the January 6, 2026 auction showed demand was heavily skewed toward the longer end of the curve, underscoring market expectations that tight monetary conditions will persist. The 210-day OMO bill drew ₦2.451 trillion in subscriptions, dwarfing the ₦277 billion recorded for the shorter 161-day tenor.
In line with its liquidity-tightening stance, the CBN fully allotted the longer-dated instrument, which matures on August 4, 2026, signalling a preference for locking up excess liquidity for extended periods. The 161-day paper, maturing on June 16, 2026, saw ₦259 billion allotted.
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Both tenors were offered at ₦300 billion each. Stop rates settled at 19.34 per cent for the 161-day bill and 19.40 per cent for the 210-day bill, broadly in line with late-December 2025 auction outcomes, where marginal rates clustered between 19.35 per cent and 19.41 per cent.
The persistence of near-20 per cent OMO yields highlights the apex bank’s resolve to maintain a tight monetary stance as it continues efforts to rein in inflation and support exchange-rate stability, despite lingering concerns around economic growth.
Market data also point to a selective liquidity absorption strategy. While demand remained elevated, the CBN has consistently tailored allotments rather than matching subscriptions in full, depending on its liquidity management objectives. In the final auctions of December 2025, for instance, allotments on some tenors fell short of total bids, even as yields remained elevated.
By fully allotting the longer tenor at the first 2026 auction, the CBN reinforced its bias toward longer-dated OMO instruments as a tool for sustained liquidity withdrawal. Across the auctions referenced, net sales remained steady at ₦300 billion per offer, reflecting a deliberate and consistent approach to liquidity control.
Open Market Operations remain one of the CBN’s primary monetary policy tools for mopping up excess liquidity and stabilising the financial system, particularly during periods of elevated inflation or pressure on the naira. However, analysts note that the scale and frequency of OMO issuances also imply a rising short-term interest burden, as instruments are rolled over at persistently high rates.
For now, the strong demand and firm stop rates at the January auction suggest that investors continue to price in prolonged monetary tightness, with little expectation of an early easing cycle in 2026.
