CBN mops up N1.95tn in fresh OMO auction as N3.35tn maturities loom

The Central Bank of Nigeria (CBN) has intensified efforts to rein in excess liquidity in the financial system, absorbing N1.945 trillion through its latest Open Market Operations (OMO) auction as it prepares for an anticipated N3.35 trillion inflow from maturing securities in the coming days.

Results of the May 29, 2026 OMO auction showed strong investor appetite for the apex bank’s short-term instruments, with total subscriptions reaching N1.952 trillion against an offer size of N400 billion.

The CBN allotted N1.945 trillion across two instruments, reflecting its determination to tighten liquidity conditions and sustain its monetary policy objectives amid ongoing inflationary pressures and efforts to stabilise the naira.

The latest exercise comes barely a week after the central bank conducted a significantly larger OMO auction on May 21, where it absorbed N3.47 trillion from the banking system. Combined, the two auctions have withdrawn N5.42 trillion from the financial system within eight days.

Analysts say the aggressive liquidity sterilisation strategy signals the CBN’s resolve to manage money supply growth while mitigating potential pressures on inflation and the foreign exchange market.

Details of the May 29 auction showed that the 102-day OMO bill attracted the strongest investor interest. Against an offer size of N200 billion, investors submitted bids worth N1.727 trillion, prompting the apex bank to allot N1.725 trillion at a stop rate of 20.37 per cent.

Similarly, the 11-day OMO bill recorded subscriptions of N225 billion against an offer size of N200 billion, with the CBN allotting N220 billion at a stop rate of 21.80 per cent.

Notably, the exercise involved no repayments, making it a pure liquidity absorption operation.

Despite the smaller size of the latest auction compared to the May 21 sale, demand remained exceptionally robust, underscoring investors’ continued preference for high-yield government securities.

During the earlier auction, the CBN offered N700 billion across three maturities but received subscriptions of N3.477 trillion, eventually allotting N3.47 trillion. The 33-day OMO bill alone attracted N1.525 trillion in subscriptions against an offer size of N300 billion and was allotted at a stop rate of 21.57 per cent.

Market analysts observed that the overwhelming demand for the 102-day instrument, despite offering the lowest yield among the bills on offer, suggests investors are increasingly willing to lock in attractive returns for longer periods amid expectations that interest rates may moderate in the future.

The latest liquidity mop-up comes ahead of sizeable maturities expected to enter the market in the first week of June.

According to analysts at Cowry Asset Management Limited, approximately N2.72 trillion in maturing OMO bills and N631.46 billion in Treasury Bills are expected to mature during the period, resulting in liquidity inflows of about N3.35 trillion.

The anticipated inflows are expected to exceed the N700 billion Treasury Bills auction scheduled for the week, potentially leaving the financial system with substantial liquidity despite the CBN’s recent sterilisation measures.

Analysts believe the large volume of maturing securities could sustain strong demand at upcoming fixed-income auctions, particularly if the central bank continues its strategy of balancing liquidity injections from maturing instruments with periodic OMO sales aimed at controlling money supply and supporting exchange rate stability.

The development highlights the delicate balancing act facing monetary authorities as they seek to contain inflation, maintain investor confidence and ensure stability in Nigeria’s financial markets.