Liquidity mop-up by the Central Bank of Nigeria (CBN) through Open Market Operations (OMO) surged by 181.87 percent within one year as the apex bank intensified efforts to rein in inflation and stabilise macroeconomic conditions.
OMO sales have been deployed as a core instrument of the CBN’s contractionary monetary policy stance, aimed at absorbing excess liquidity from the financial system to tame price pressures. This approach mirrors global central banking practices, where the sale of securities is used to tighten monetary conditions by reducing money supply.
Data from the CBN show that OMO sales climbed sharply to N33.12 trillion in 2025, representing about a 182 percent increase compared with N11.75 trillion auctioned in 2024.
Inflation moderated in 2025, largely reflecting the impact of the bank’s tight monetary policy stance, improved coordination between fiscal and monetary authorities, greater stability in the foreign exchange (FX) market, and the base effect. Excess liquidity persisted for much of the year due to large injections from Ways and Means advances, government spending, foreign exchange inflows, and maturing CBN instruments. By scaling up OMO auctions, the CBN mopped up surplus naira liquidity from banks and other eligible investors to reduce inflationary pressure.
Nigeria’s headline inflation rate maintained its downward trend in November 2025, easing to 14.45 percent from 16.05 percent in October, underscoring the effect of sustained tightening in monetary conditions.
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Since the beginning of this year, the apex bank has not conducted any OMO auction, with the most recent one held on December 30, 2025, amounting to N1.3 trillion.
Ayodele Akinwunmi, chief economist at United Capital Plc, said the CBN has consistently deployed OMO as a central tool for liquidity management and price stability. He noted that the instrument has also been strategically used to attract foreign portfolio investments, helping to support naira stability, reduce excess money supply, and strengthen the disinflation process. According to him, these combined outcomes have bolstered investor confidence and reinforced Nigeria’s attractiveness as an investment destination.
The CBN said maintaining monetary, price, and financial system stability in support of sustainable economic growth remains central to its policy direction. In 2025, the bank held its key policy parameters unchanged until August in order to sustain the disinflationary momentum recorded during the year. This followed a contractionary phase in 2024, when the Monetary Policy Rate (MPR) was raised by a cumulative 875 basis points to 27.50 percent, while the standing facilities corridor was maintained at +500/–100 basis points. The Liquidity Ratio was kept at 30.00 percent, while the Cash Reserve Ratio stood at 50.00 percent for commercial banks and 16.00 percent for merchant banks.
After achieving a degree of macroeconomic stability in 2025, the bank adjusted some parameters in September to further support economic conditions. The MPR was reduced to 27.00 percent. The standing facilities corridor adjusted to ±250 basis points, and the CRR lowered to 45.00 percent for commercial banks, while a 75.00 percent CRR was introduced on non-TSA public sector deposits. At the November 2025 Monetary Policy Committee meeting, the CBN further adjusted the standing facilities corridor to +50/–450 basis points, while retaining other policy settings.
On the repayment side, the CBN spent N20.58 trillion on OMO maturities in 2025, representing a 9.8 percent increase over N10.73 trillion in 2024.
Earlier this year, the banking and financial regulator repaid OMO bills worth N810.1 billion to investors, a development that pushed banks’ standing deposit facility placements up by 42 percent to N1.99 trillion on Wednesday from N1.40 trillion recorded the previous day.