Nigeria’s Central Bank Injects 3.20 Trillion Naira in October as Maturities Exceed Issuance
Key Facts
The Central Bank of Nigeria recorded a net liquidity injection of about 3.20 trillion naira in October 2026, as maturity payments exceeded the amount it raised through open market operations and Treasury bills, according to Nairametrics. Maturities totaled 10.69 trillion naira, against 7.49 trillion naira raised through issuance during the month. The gap returned more money to investors than the central bank withdrew through auctions. Nairametrics said new issuance replaced only about 70% of the funds returned. That puts October in the opposite direction from the previous month, when the central bank’s operations resulted in a net liquidity withdrawal.
In September, the central bank sold about 17.51 trillion naira in open market operation bills, while repaying about 10.89 trillion naira in maturing bills. The difference resulted in a net liquidity withdrawal of about 6.62 trillion naira, according to Nairametrics. In October, maturities of 10.69 trillion naira exceeded the 7.49 trillion naira raised through auctions. The difference in monthly outcomes reflects a shift in the direction of flows between the two months. In the week ended October 23, the central bank sold 2.629 trillion naira of open market operation bills with maturities of 138 and 180 days, at yields of 17.63% and 17.14%, respectively, according to BusinessDay.
Nigeria’s banking system liquidity stood at 6.936 trillion naira in the week ended October 23, up 10.39% from 6.283 trillion naira in the previous week, according to BusinessDay. But the pace of the increase slowed from a 69.39% jump in the preceding week. Inflows included maturities of open market operation bills worth 2.067 trillion naira and Treasury bill maturities worth 392.79 billion naira. They also included government bond coupon payments and a distribution of 2.43 trillion naira from Federation Accounts. By contrast, central bank operations absorbed some of the incoming liquidity, the newspaper reported.
The weekly rise in liquidity coincided with a 59-basis-point decline in average Treasury bill yields to 17.64%, according to BusinessDay. The one-month bill yield fell 198 basis points to 16.85%, while the three-month yield declined 96 basis points to 16.69%. At the other end of the curve, the six-month yield rose 9 basis points to 17.79%. Results from the October 28 auction showed stop rates falling to 15.40% for 91 days, 15.79% for 182 days and 15.80% for 364 days. These moves alone do not establish that October’s injection lowered interbank lending rates.
At the October 28 Treasury bill auction, the Debt Management Office allotted just 71.16 billion naira from an offer of 800 billion naira, despite receiving subscriptions worth 1.91 trillion naira, according to BusinessDay. The difference between subscriptions and allotments shows that the office did not accept most of the amounts offered by investors in that auction. The office had been scheduled to return to the market on October 28 with a total offer of 800 billion naira, with settlement scheduled for October 29. By the time the story was published on November 2, both dates had passed. BusinessDay said the subsequent direction of bill yields would depend on system liquidity, the volume of central bank open market operation bill issuance and pricing decisions at subsequent auctions.
The liquidity and yield moves follow a change in Nigeria’s monetary policy rate in September. The Monetary Policy Committee cut the rate to 23% at its September 21-22 meeting, after keeping it at 26.5% at its July meeting, according to Central Bank of Nigeria data. In October, the central bank held the policy rate at 23%, according to EL7 data accompanying the October 23 story. Meanwhile, headline annual inflation eased to 14.63% in September from 15.39% in August, according to central bank data. System liquidity, open market operation issuance and Treasury bill pricing decisions remain factors the market monitors when tracking yields at upcoming auctions.