CBN absorbs N1.945trn in OMO Auction as strong demand persists ahead of N3.35trn  inflow

The Central Bank of Nigeria removed N1.945 trillion from the financial system through its May 29, 2026 Open Market Operations auction, stepping up efforts to sterilise excess liquidity before an anticipated N3.35 trillion inflow from maturing OMO and Treasury Bills.

Results from the latest OMO auction showed investors submitted bids worth N1.952 trillion against a combined offer of N400 billion, highlighting strong appetite for short-term government securities.

The sale came just one week after the apex bank conducted a larger OMO auction on May 21, where it allotted N3.47 trillion against subscriptions of N3.48 trillion. That brought total liquidity mopped up within eight days to N5.42 trillion.

The May 29 auction featured two OMO instruments: a 102-day bill and an 11-day bill, both drawing robust investor participation.

Total subscription hit N1.952 trillion against an offer of N400 billion, while total allotment stood at N1.945 trillion, reflecting overwhelming demand.

For the 102-day bill, investors subscribed N1.727 trillion against a N200 billion offer, with the CBN allotting N1.725 trillion at a stop rate of 20.37 percent.

The 11-day bill recorded subscriptions of N225 billion against a N200 billion offer, and N220 billion was allotted at a stop rate of 21.80 percent.

The auction involved no repayments, marking a pure liquidity absorption exercise.

Although the May 29 sale was smaller than the May 21 exercise, investor appetite remained strong across tenors. In the May 21 auction, the CBN had offered N700 billion across three tenors but received subscriptions of N3.477 trillion, with total allotments reaching N3.47 trillion.

Combined, the two auctions absorbed N5.42 trillion in just over a week, reinforcing the CBN’s commitment to tightening liquidity conditions amid inflationary pressures and foreign exchange management efforts.

Analysts expect large maturities of about N2.72 trillion in OMO bills and N631.46 billion in Treasury Bills during the first week of June.

In its weekly market outlook, Cowry Asset Management Limited projected total liquidity inflows of N3.35 trillion for the week, driven by maturing short-term instruments.

The analysts said the large maturity profile could sustain strong demand at upcoming fixed-income auctions if the apex bank maintains its liquidity management strategy.

The sustained liquidity mop-up reflects the CBN’s broader monetary policy tightening stance aimed at managing inflation expectations and reducing excess cash in the banking system, which has remained elevated due to maturing instruments and fiscal-related inflows.

Market analysts say such operations help anchor short-term interest rates and improve monetary policy transmission across the financial system. However, they also note that aggressive liquidity sterilisation may keep funding costs elevated for banks and corporate borrowers in the near term.

Despite this, investor appetite for OMO bills remains strong due to attractive yields compared with other short-term investment alternatives in the domestic market.

According to analysts, the large maturity wave expected in early June could temporarily boost system liquidity even as the CBN continues its sterilisation efforts.

About The Author

Dele Fashomi

Dele Fashomi, seasoned journalist and communication teacher, is a holder of Master of Arts degree in Communication and Language Arts from the University of Ibadan in 1992/93.

Earlier, he had bagged a Bachelor degree from the same university in 1984, after which he proceeded to the Nigerian Institute of Journalism, Lagos, in 1990, for a postgraduate diploma in Journalism.

He had done many courses in communication, including the EU-BBC Editing Course in 2002.

Mr. Fashomi combines effectively the practice, research and teaching of communication. And to date, he has published two academic works in communication: Issues in Communication Technology and Policy (2010) and Economic and Social Issues in Advertising and PR (2013).

He had his first break in the Nigerian media in Concord Newspapers in 1990 and today, he has over two and half decades experience earned in several newspapers.

He has been part of many start-ups, such as The Republic (1987), The Comet (1999), The Anchor 2001 – 2002; Sun Newspapers (2003); Westerner newsmagazine (2005 – 2010) as Editor; National Life (2011) as Sunday Editor, and Newswatch Newspapers (2012- 2016) as Daily Editor.

Dele Fashomi is now the Publisher/Editor-in-Chief of Newstide247.com newspaper online, which he started in July 2015. He is also into biography writing, with many books in his trail, some of which he wrote alone and one he co- authored with his mentor, Mr Dare Babarinsa, entitled:  Olabiyi Durojaiye – DARE TO BE DiFFERENT. He also guided and collaborated with Pa Olatunji Odusanya in writing his autobiography – AGAINST ALL ODDS. There are many other books in the works under his pen.

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