The Central Bank of Nigeria (CBN) has absorbed approximately N6.88 trillion from the financial system through Open Market Operations (OMO) auctions in the first two weeks of the month.
Nairametrics analysis of the financial data of the apex bank published at the close of business on June 11, 2026, shows that the liquidity mop-up represents about 63% of the total projected inflows for June.
The aggressive liquidity withdrawal follows a projected N10.90 trillion inflows in June with N7.77 trillion from OMO maturities alone, according to the Financial Markets Dealers Association (FMDA), raising the risk of excess liquidity and inflationary pressures.
What the data is saying:
Data from OMO auctions conducted during the first and second weeks of June show that demand was strongest for OMO instruments with tenors exceeding 130 days while shorter-tenor instruments attracted weaker interest despite offering higher stop rates.
- The CBN conducted OMO auctions on June 2, 8, and 11.
- Total successful allotments across the auctions hit N6.88 trillion, about 63% of the N10.90 trillion projected inflows expected in June.
- Investor subscriptions exceeded N7.2 trillion, reflecting robust appetite for high-yield OMO instruments.
- Stop rates ranged between 19.98% and 21.89%, indicating that yields remained elevated despite strong demand.
- The June 2 133-day OMO auction attracted subscriptions of N2.482 trillion, more than 12 times the amount offered.
- A 134-day OMO auction conducted on June 8 recorded subscriptions of N1.605 trillion, all of which were allotted.
- The 138-day OMO bill attracted N1.84 trillion in subscriptions, accounting for the bulk of investor demand.
A breakdown of the auctions shows that the CBN allotted N2.409 trillion in a 133-day OMO bill during the June 2 auction despite offering only N200 billion, the largest liquidity withdrawal in the review period.
More insights:
The scale of the CBN’s liquidity absorption highlights the challenge of managing system liquidity despite sustained tightening efforts.
- June’s projected inflows are expected to be led by N7.77 trillion in OMO maturities, representing about 71% of total expected inflows.
- FAAC disbursements of N1.80 trillion and Treasury Bills maturities of nearly N1 trillion are also expected to inject liquidity into the banking system.
- The CBN had already withdrawn an estimated N12.06 trillion from the financial system in May, yet average system liquidity still rose to N5.22 trillion.
- Strong OMO demand indicates that substantial liquidity remains available within the banking sector.
With more than half of the month projected inflows already sterilized through OMO sales in the first two weeks, market participants expect the apex bank to maintain an active presence in the money market for the remainder of June.
What you should know:
The FMDA, an umbrella body of financial market dealers and treasury professionals in Nigeria, had projected that a total of N10.90 trillion would hit the financial system in June with maturing OMO bills expected to account for N7.7 trillion of the inflows, necessitating CBN’s aggressive cash mop-up to reign in excess liquidity and inflationary pressures.
Liquidity injection into Nigeria’s financial system remains heavily influenced by multiple sources including maturing debt instruments, monthly fiscal allocations and heavy spendings across sectors, necessitating the CBN’s sterilisation operations.
- Total projected inflows for June stand at N10.90 trillion, up from N10.53 trillion in May.
- OMO maturities remain the largest source of liquidity injections into the system.
- Elevated liquidity conditions continue to support demand for fixed-income securities.
- The strong oversubscription levels recorded across June auctions suggest investors remain attracted to OMO yields around the 20% mark despite tightening monetary conditions.
The first-half June auction results indicate that the CBN has made significant progress in withdrawing excess funds from the market relative to the projected inflows in June. However, substantial liquidity injections could still hit the system before month-end, potentially requiring additional sterilisation measures to preserve current monetary conditions. (Nairametrics)
