CBN liquidity mop-up intensifies as the apex bank absorbs N1.95tn through OMO auctions ahead of N3.35tn in maturing securities

The Central Bank of Nigeria has intensified efforts to tighten monetary conditions, absorbing N1.945 trillion from the financial system through its latest Open Market Operations auction amid expectations of a N3.35 trillion liquidity inflow from maturing securities in the coming days.

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Results of the May 29, 2026 OMO auction showed overwhelming investor demand, with total subscriptions reaching N1.952 trillion against an offer size of N400 billion.

The apex bank eventually allotted N1.945 trillion across two short-term instruments, highlighting its determination to manage excess liquidity, support exchange rate stability and sustain its fight against inflation.

The latest operation comes just days after the CBN conducted a larger OMO auction on May 21, during which it absorbed N3.47 trillion from the banking system.

Combined, the two exercises have withdrawn approximately N5.42 trillion from the financial system within eight days, underscoring the scale of the central bank’s liquidity management efforts.

Analysts said the aggressive CBN Liquidity Mop-Up strategy reflects the regulator’s commitment to containing money supply growth and preventing excess liquidity from fuelling inflationary and foreign exchange pressures.

Details of the 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.

The CBN allotted N1.725 trillion on the instrument at a stop rate of 20.37 per cent.

The 11-day OMO bill also recorded strong participation, attracting subscriptions worth N225 billion against an offer size of N200 billion.

The central bank allotted N220 billion on the short-dated instrument at a stop rate of 21.80 per cent.

Unlike some previous operations, the latest auction involved no repayments, making it a pure liquidity absorption exercise.

Despite offering a smaller volume compared to the May 21 auction, investor demand remained exceptionally strong, reflecting sustained appetite for high-yield government securities.

During the earlier sale, the apex bank offered N700 billion across three maturities but received subscriptions totalling N3.477 trillion and eventually allotted N3.47 trillion.

The 33-day OMO bill in that auction alone attracted N1.525 trillion in subscriptions against an offer size of N300 billion and cleared at a stop rate of 21.57 per cent.

Market analysts noted that the heavy demand for the 102-day instrument, despite carrying the lowest yield among the securities offered, suggests investors are increasingly willing to lock in returns over longer periods amid expectations that interest rates could ease in the future.

The liquidity tightening measures come ahead of substantial maturities expected to hit the market during the first week of June.

According to analysts at Cowry Asset Management Limited, about N2.72 trillion in maturing OMO bills and N631.46 billion in Treasury Bills are expected to mature, injecting approximately N3.35 trillion into the financial system.

The expected inflow exceeds the N700 billion Treasury Bills auction scheduled for the same period, potentially leaving the banking sector with significant liquidity despite recent sterilisation efforts.

Analysts said the large volume of maturing securities could sustain strong demand at upcoming fixed-income auctions, particularly if the central bank continues to balance liquidity injections with periodic OMO sales.

Also read: CBN tight policy slows credit growth, analysts warn

The latest CBN Liquidity Mop-Up highlights the delicate task facing monetary authorities as they seek to curb inflation, preserve investor confidence and maintain stability in Nigeria’s financial and foreign exchange markets.