Liquidity collection by the Central Bank of Nigeria (CBN) through Open Market Operations (OMO) increased by 181.87 per cent within a year as the apex bank stepped up efforts to rein in inflation and stabilize macroeconomic conditions.
OMO sales have been deployed as the main instrument of the CBN's contractionary monetary policy stance, aimed at absorbing excess liquidity from the financial system to ease price pressures. This approach mirrors global central banking practices, where the sale of securities is used to strengthen monetary conditions by reducing the money supply.
CBN data shows that OMO sales rose sharply to N33.12 trillion in 2025, representing an increase of about 182 per cent compared to the N11.75 trillion auctioned in 2024.
Inflation declined in 2025, largely reflecting the impact of the Bank's tight monetary policy stance, better coordination between fiscal and monetary authorities, greater stability in the foreign exchange (FX) market, and base effects. Excess liquidity persisted for most of the year due to Ways and Means advances, government spending, foreign exchange inflows and large investments of mature CBN instruments. By mounting OMO auctions, the CBN diverted surplus Naira liquidity from banks and other eligible investors to ease inflationary pressures.
Nigeria's core inflation rate maintained a declining trend in November 2025, slowing to 14.45 percent from 16.05 percent in October, underscoring the impact of the continued tightening of monetary conditions.
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Since the beginning of this year, the apex bank has not conducted any OMO auction, the most recent auction was held on December 30, 2025, amounting to N1.3 trillion.
Ayodele Akinwunmi, Chief Economist of United Capital Plc, said the CBN has consistently deployed OMO as a central tool for liquidity management and price stability. He said the tool has also been used strategically to attract foreign portfolio investment, support naira stability, reduce excess money supply and help strengthen the disinflation process. According to him, these combined results have enhanced investor confidence and strengthened the attractiveness of Nigeria as an investment destination.
The CBN said maintaining monetary, price and financial system stability in support of sustainable economic growth is central to its policy direction. In 2025, the Bank kept its key policy parameters unchanged until August in order to maintain the pace of deflation recorded during the year. This was followed by a contractionary phase in 2024, when the monetary policy rate (MPR) was raised by a cumulative 875 basis points to 27.50 per cent, while the standing facilities corridor was maintained at +500/-100 basis points. The liquidity ratio was kept at 30.00 per cent, while the cash reserve ratio remained at 50.00 per cent for commercial banks and 16.00 per cent for merchant banks.
The bank adjusted some parameters in September to further support economic conditions, after securing a degree of macroeconomic stability in 2025. MPR was reduced to 27.00 percent. The standing facility corridor was adjusted to ±250 basis points, and the CRR for commercial banks was reduced to 45.00 per cent, while a CRR of 75.00 per cent was introduced on non-TSA public sector deposits. At the November 2025 Monetary Policy Committee meeting, the CBN adjusted the standing facilities corridor to +50/-450 basis points while maintaining other policy settings.
On the repayment side, the CBN projects N20.58 trillion on OMO maturities in 2025, representing an increase of 9.8 per cent from N10.73 trillion in 2024.
Earlier this year, the banking and financial regulator repaid OMO bills worth N810.1 billion to investors, a development which increased banks' standing deposit facility placements by 42 per cent to N1.99 trillion on Wednesday from N1.40 trillion recorded the previous day.
