OMO Sold ₦2.6 Trillion in One Day Junior: Uncle Tunde, I saw OMO sold ₦2.6 trillion in one day. People must really be washing clothes in this country. Tunde: It's not that kind of OMO, Junior. This one stands for Open Market Operations, a tool used by the CBN to manage money in the financial system. Junior: So how does it work? Tunde: When there is too much money circulating, the CBN sells OMO bills to banks and investors. They pay the CBN, earn a return, and the money is temporarily taken out of circulation. That is why people say OMO helps the CBN "mop up liquidity." Junior: So OMO detergent mops up dirt and OMO bills mop up money? Tunde: Exactly! Junior: But isn't that what Treasury Bills do too? Tunde: They are similar because both are short-term investments, but their purpose is different. Treasury Bills (T-bills) help finance the Federal Government (FG), while OMO bills are the CBN's own tool for managing liquidity. A simple way to remember it: T-bills for FG, OMO for CBN. Junior: So why did ₦2.6 trillion make the news? Tunde: On 12 August, the CBN reopened OMO to individuals, companies and other eligible investors, after limiting it mainly to banks and foreign investors since 2019. The very next day, it offered ₦600 billion in OMO bills and investors bid almost ₦5 trillion. The CBN ended up selling about ₦2.6 trillion, more than four times what it had offered, at rates around 20% per annum. Junior: Was that a one-off? I doubt the CBN can sell that much again. Tunde: Not at all. At another auction on 26 August, the CBN offered ₦1 trillion. Investors bid ₦4.26 trillion and the CBN eventually sold ₦2.8 trillion. The rates were still just under 20%. Junior: So can I buy OMO now? Tunde: Yes, through your bank. Ask them about the minimum amount, available tenor and current rate. And remember, those rates are annualised. A 20% annual rate doesn't mean you earn 20% over a few months. Junior: Thanks Uncle! I just realised something. OMO locked ordinary Nigerians out for almost seven years and now it's back. How long have Uncle Tunde and Junior been away? Tunde: Junior, at least OMO came back offering around 20%. You returned with nothing but questions!