The Central Bank of Nigeria (CBN) absorbed N1.945 trillion from the financial system through its May 29, 2026 Open Market Operations (OMO) auction, as it moved to sterilise excess liquidity ahead of an expected N3.35 trillion inflow from maturing OMO and Treasury Bills securities.
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The latest OMO auction results show that investors submitted bids worth N1.952 trillion against a combined offer size of N400 billion, underscoring strong demand for short-term government securities.
The auction comes just one week after the apex bank conducted a much larger OMO sale on May 21, where it allotted N3.47 trillion against subscriptions of N3.48 trillion, bringing total OMO liquidity mop-ups within eight days to N5.42 trillion.
What the data is saying:
The May 29 auction consisted of two OMO instruments and attracted substantial investor participation across both tenors.
- Total amount offered: 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. The apex bank eventually allotted N1.725 trillion at a stop rate of 20.37%.
- The 11-day OMO bill attracted subscriptions of N225 billion against an offer size of N200 billion, with N220 billion allotted at a stop rate of 21.80%.
The auction did not involve any repayments, indicating a pure liquidity absorption exercise by the apex bank.
More insights:
Although the May 29 auction was smaller than the May 21 exercise, investor demand remained exceptionally strong.
- The earlier May 21 auction saw the CBN offer N700 billion across three tenors but receive subscriptions of N3.477 trillion, with total allotments reaching N3.47 trillion.
- Notably, the 33-day OMO bill auctioned on May 21 attracted N1.525 trillion in subscriptions against an offer size of N300 billion and was fully allotted at a stop rate of 21.57%.
- Combined, the two auctions absorbed N5.42 trillion from the banking system within a little over one week, reinforcing the CBN’s commitment to tightening liquidity conditions amid ongoing inflation and exchange rate management efforts.
Despite carrying the lowest yield among the instruments offered, the 102-day tenor remained the most sought-after paper in the May 29 auction, suggesting investors are increasingly willing to lock in yields for longer durations.
What you should know:
The aggressive liquidity mop-up comes ahead of substantial maturities expected to hit the market in the coming days.
- Research analysts at Cowry Asset Management Limited expect maturities of approximately N2.72 trillion in OMO bills and N631.46 billion in Treasury Bills in first week of June.
- In the May 29 Cowry Weekly Financial Markets Review & Outlook, the analysts projected total liquidity inflows of N3.35 trillion this new week.
- These inflows are expected to comfortably outweigh the planned N700 billion Treasury Bills auction scheduled for the first week of June, potentially sustaining robust system liquidity despite the CBN’s recent sterilisation operations.
The Cowry Asset analysts say the large maturity profile could support continued strong demand at upcoming fixed-income auctions, particularly if the apex bank maintains its current strategy of balancing liquidity injections from maturing instruments with periodic OMO sales aimed at controlling money supply and supporting naira stability.
