The Central Bank of Nigeria (CBN) has absorbed N1.945 trillion from the financial system through its Open Market Operations (OMO) auction held on May 29, 2026, in a continued effort to manage excess liquidity in the banking system.
The move comes ahead of expected inflows of about N3.35 trillion from maturing OMO and Treasury Bills, which could further increase liquidity levels if not sterilised.
According to auction results, total investor subscriptions reached N1.952 trillion against an offer size of N400 billion, reflecting strong appetite for short-term government securities.
The latest operation follows a much larger OMO auction conducted on May 21, where the apex bank allotted N3.47 trillion, bringing total liquidity mop-up within eight days to N5.42 trillion.
The May 29 auction featured two OMO instruments and recorded significant demand across both maturities.
Total offer: N400 billion
Total subscriptions: N1.952 trillion
Total allotment: N1.945 trillion
For the 102-day OMO bill, the CBN offered N200 billion but received subscriptions of N1.727 trillion, eventually allotting N1.725 trillion at a stop rate of 20.37 per cent.
The 11-day bill attracted subscriptions of N225 billion against an offer of N200 billion, with N220 billion allotted at a stop rate of 21.80 per cent.
Unlike previous operations involving rollovers, the May 29 auction did not include any repayments, making it a pure liquidity absorption exercise.
Investor demand remained robust despite the smaller size of the auction compared to the May 21 issuance.
During that earlier auction, the CBN offered N700 billion across three tenors but received subscriptions of N3.477 trillion, eventually allotting N3.47 trillion.
The 33-day bill alone attracted N1.525 trillion in bids against a N300 billion offer, highlighting strong demand for short-term risk-free assets.
Combined, both auctions have drained N5.42 trillion from the financial system within just over a week, underscoring the CBN’s aggressive liquidity management stance.
Analysts say the policy reflects the apex bank’s ongoing efforts to curb inflationary pressures and stabilise the foreign exchange market by tightening system liquidity.
Despite offering lower yields, the 102-day instrument remained the most sought-after paper in the latest auction, suggesting investors are willing to lock in returns for longer durations amid market uncertainty.
Looking ahead, analysts at Cowry Asset Management Limited expect significant liquidity inflows in early June, driven by maturities estimated at N2.72 trillion in OMO bills and N631.46 billion in Treasury Bills.
Total inflows are projected at about N3.35 trillion in the first week of June alone, which could offset the CBN’s recent mop-up efforts.
The analysts noted that these inflows are likely to sustain strong demand at upcoming fixed-income auctions, especially if the CBN continues its strategy of balancing liquidity injections with periodic sterilisation operations.
Market watchers say the central bank’s approach remains focused on managing money supply, curbing inflation risks, and supporting stability in the naira exchange rate.
