The Central Bank of Nigeria (CBN) is set to confront renewed liquidity management pressures in June 2026 as Nigeria’s financial system is projected to receive N10.90 trillion in inflows, largely driven by maturing Open Market Operations (OMO) bills.

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This is according to the Financial Markets Dealers Association (FMDA) Monthly Market Report published on June 1, which showed that June’s projected inflows represent a 3.51% increase from the N10.53 trillion recorded in May.

The development comes despite the apex bank’s aggressive liquidity tightening efforts in May, during which it withdrew an estimated N12.06 trillion from the financial system.

However, average system liquidity still expanded by 7.76% to N5.22 trillion, highlighting the challenge of containing excess liquidity amid large recurring inflows.

What the data is saying: 

The FMDA report indicates that OMO maturities will remain the dominant source of liquidity inflows into the financial system during June. The N7.77 trillion expected from maturing OMO bills accounts for approximately 71% of total projected inflows for the month.

  • Total projected inflows for June 2026 stand at N10.90 trillion, up 3.51% from N10.53 trillion recorded in May.
  • OMO maturities are projected at N7.77 trillion, rising from N7.17 trillion in May and accounting for the largest share of liquidity inflows.
  • FAAC disbursements are expected at N1.80 trillion, while Treasury Bills maturities are projected at N995.81 billion.
  • FGN bond coupons, corporate bond maturities, and commercial paper maturities are estimated at N278.99 billion, N49.04 billion, and N10.46 billion respectively.

The data underscores the cyclical nature of liquidity management in Nigeria, where OMO instruments used to absorb liquidity eventually mature and return substantial cash to the banking system, necessitating fresh sterilisation measures by the CBN.

More insights

The May liquidity data provides important context for understanding the scale of the challenge facing monetary authorities in June.

  • Despite withdrawing an estimated N12.06 trillion through liquidity management operations in May, average system liquidity increased by 7.76% to N5.22 trillion.
  • The Standing Deposit Facility (SDF) closed May at N5.89 trillion on May 29, reflecting continued excess reserves within the banking system.
  • Banks continued to deposit significant surplus funds with the CBN overnight, indicating that liquidity levels remained elevated despite aggressive tightening measures.
  • The projected N7.77 trillion OMO maturities in June suggest the CBN may need to match or exceed May’s liquidity mop-up operations to maintain current market conditions.

In addition, the projected N1.80 trillion FAAC disbursement will provide another significant source of liquidity injection into the economy, further complicating efforts to manage excess system funds.

What you should know: 

Nigeria’s broader fiscal and monetary environment continues to contribute to elevated liquidity conditions within the financial system.

  • Nigeria’s N20.12 trillion budget deficit for 2026 is expected to be financed largely through domestic borrowing, creating additional liquidity through government expenditure.
  • Cumulative OMO sales between January and April 2026 reached approximately N30.12 trillion, reflecting the scale of the CBN’s sterilisation efforts.
  • The FMDA noted that strong liquidity conditions are expected to support investments in fixed-income securities and ease funding pressures in the interbank market.
  • The association also highlighted that foreign exchange turnover exceeded $8 billion in May, while external reserves increased by more than $1 billion during the month.

The FMDA advised investors to position portfolios to benefit from elevated liquidity conditions and significant inflows expected in June, while maintaining prudent foreign exchange risk management strategies amid lingering currency market uncertainties.