CBN OMO Sales Surge Over Fivefold To N18.79trn In Q1 2026

BY Charles Ebi

Central Bank of Nigeria ,CBN, ramped up its Open Market Operations ,OMO, sales to N18.79 trillion in the first quarter of 2026, marking a 426% increase from N3.57 trillion recorded in the same period of 2025.

The figures are contained in CBN’s latest financial data covering 2025 and 2026.

The data also show higher OMO repayments moderating the overall liquidity impact, as net OMO sales declined to N1.81 trillion from N2.01 trillion a year earlier.

The development signals a shift in the CBN’s liquidity management strategy, reflecting more aggressive intervention in the money market while allowing larger maturities to flow back into the system.

It also underscores how monetary authorities are balancing inflation control, exchange rate stability, and capital flow pressures in a volatile global environment.

CBN data shows a sharp increase in OMO activity in response to evolving liquidity and inflation dynamics during the period under review. The figures point to a significantly more active monetary stance compared to the same period in 2025.

Total OMO sales rose by about 426% year-on-year, increasing from N3.57 trillion in Q1 2025 to N18.79 trillion in Q1 2026.

OMO repayments surged even more sharply by roughly 990%, climbing from N1.56 trillion to N16.98 trillion.

Net OMO sales declined by about 10.1%, falling from N2.01 trillion to N1.81 trillion, indicating a less aggressive net liquidity withdrawal.

Monthly trends showed volatility, with January posting N8.54 trillion in sales and N5.63 trillion in repayments.

February recorded higher repayments than sales, and March closed with a net withdrawal of about N1.97 trillion.

These figures highlight a dynamic liquidity management approach, where issuance and repayments are actively calibrated to stabilise the financial system.

A contrast between CBN issuance data and FMDQ Securities Exchange figures reveals deeper market dynamics.

While the CBN reported N18.79 trillion in issuance, FMDQ recorded N59.45 trillion in OMO bills turnover during the same period.

The CBN figure reflects primary issuance, while FMDQ captures secondary market trading.

OMO bills are increasingly traded multiple times, boosting turnover far beyond issuance levels.

The instruments now dominate Nigeria’s fixed-income market due to their liquidity and short tenor.

High turnover indicates intense liquidity recycling and active portfolio management by investors.

This shift suggests that OMO bills have evolved beyond liquidity tools into highly tradable assets, shaping market behaviour.

Market analysts say the surge reflects both liquidity pressures and broader monetary policy objectives, with implications for investor behaviour and financial stability. Experts also note that the divergence between issuance and turnover is largely structural.

Olubunmi Ayokunle of Agusto & Co said: “The disparity between CBN’s N18.79 trillion OMO issuance and FMDQ’s N59.45 trillion turnover is not a contradiction—it reveals a highly active secondary market where liquidity is continuously recycled”.

He added: “The CBN reports primary market issuance… while FMDQ captures secondary market activity where instruments are traded multiple times”.

Ayokunle further explained: “Despite large gross issuance, net OMO impact is relatively small, indicating a calibrated liquidity management strategy rather than outright tightening”.

He noted that elevated OMO yields reflect intense competition for capital and the need to retain foreign investors in a volatile global environment.

Charles Fakrogha, CEO of ECL Asset Management, explained that the surge in OMO issuance reflects periods of excess liquidity, prompting the CBN to intensify its mop-up operations.

“OMO is used to stabilise liquidity. When there is too much money in the system, the CBN withdraws it. When liquidity tightens, it allows funds to flow back”, he said.

He also highlighted a policy tension between growth ambitions and monetary tightening.

“A $1 trillion economy requires liquidity, but too much liquidity fuels inflation and exchange rate instability. The CBN is balancing these competing priorities,” he added.

In the view of the money market experts, the CBN is carefully balancing liquidity withdrawal with system stability, pointing out that elevated OMO yields as high as 21.9% for short tenors are designed to attract foreign investors and retain capital in a competitive global environment. They insist that lowering rates too quickly could trigger capital outflows and destabilise the exchange rate.

The intensified use of OMO bills alongside Treasury Bills reflects a broader strategy to manage fiscal financing and macroeconomic stability in Nigeria. These instruments play distinct but complementary roles in the financial system.

Treasury Bills are issued to finance government deficits, while OMO bills are used to control liquidity and inflation.

Nigeria’s 2026 budget carries a deficit of N20.12 trillion, with over 70% expected to be funded through domestic borrowing.

High issuance levels are pushing interest rates upward, increasing borrowing costs and potentially crowding out private sector credit.

Strong reliance on short-term instruments exposes the economy to refinancing risks and sensitivity to investor sentiment.

The interplay between OMO issuance, repayments, and market trading reflects a financial system undergoing significant pressure and adjustment.  

As yields remain elevated and liquidity conditions fluctuate, market participants will continue to monitor the CBN’s policy direction and its implications for growth, inflation, and investor confidence.