CBN withdraws N3.04trn in single OMO auction as investor demand hits N3.28trn

THE Central Bank of Nigeria (CBN) withdrew N3.04 trillion from the banking system through a single Open Market Operations (OMO) auction conducted on June 5, 2026, after investor demand across three maturities far exceeded the N600 billion initially offered.

Analysis of the CBN’s OMO auction results and financial market data between June 2 and June 5 showed that total subscriptions reached N3.275 trillion, translating to an oversubscription rate of 5.46 times the amount on offer.

The outcome reflects the apex bank’s continued aggressive liquidity sterilisation drive, despite indications that excess liquidity within the banking system moderated slightly during the review period.

The latest operation comes on the heels of two major OMO auctions in May that jointly mopped up trillions of naira from the financial system.

Details

Details of the June 5 auction reveal strong investor appetite, especially for longer-tenor instruments. The 7-day OMO bill attracted subscriptions worth N179 billion against the N200 billion offered, while the CBN allotted N169 billion at a stop rate of 21.54 percent.

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For the 35-day tenor, subscriptions rose to N614.43 billion compared to the N200 billion offered, with the apex bank allotting N465 billion at a stop rate of 21.40 percent.

The 133-day bill emerged as the most attractive instrument, recording subscriptions of N2.48 trillion against a N200 billion offer. The CBN eventually allotted N2.41 trillion at a stop rate of 20.02 percent.

Overall, the apex bank offered N600 billion, received total subscriptions of N3.275 trillion, and allotted N3.04 trillion, effectively withdrawing the same amount from the banking system.

The figures suggest that investors continue to channel surplus liquidity into CBN sterilisation instruments, with demand concentrated on longer-dated securities despite relatively lower yields.

The 133-day bill’s oversubscription ratio of 12.4 times points to increasing investor willingness to lock in funds for longer periods amid expectations that monetary tightening will persist.

Other market activities during the week also contributed to tighter liquidity conditions in the financial system.

Primary market operations conducted on June 4 led to a net liquidity withdrawal of N992.68 billion after N1.46 trillion in Nigerian Treasury Bills (NTBs) and FGN bond sales offset repayments totaling N464.60 billion.

Opening balances of banks and discount houses fell from N108.27 billion on June 2 to N45.14 billion on June 3 before closing at N43.92 billion on June 5.

This represented a decline of about N64.35 billion, equivalent to a 59.43 percent reduction during the period.

Meanwhile, balances in the Standing Deposit Facility (SDF) increased slightly from N5.29 trillion on June 3 to N5.35 trillion on June 4 before easing to N4.74 trillion by June 5.

The decline in SDF balances indicates that liquidity conditions may be tightening gradually, although significant excess liquidity still remains in the banking sector.

Data from the period also indicates that the CBN continues to depend heavily on OMO auctions and primary market operations to manage liquidity under the current monetary policy stance.

Despite the aggressive liquidity mop-up operations, projections suggest that substantial inflows are still expected to enter the banking system during June.

According to estimates by the Financial Markets Dealers Association (FMDA), total inflows into the banking system could reach approximately N10.90 trillion during the month.

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Of the projected amount, around N7.77 trillion is expected to come from maturing OMO bills.

The N3.04 trillion absorbed during the June 5 auction accounted for roughly 27.9 percent of projected monthly inflows and effectively sterilised the N2.73 trillion OMO repayment that matured on the same day.

Cumulative OMO sales between January and April 2026 had already climbed to about N30.12 trillion, highlighting the unprecedented scale of liquidity management by the CBN this year.

The latest auction further reinforces expectations that the apex bank will maintain its tight monetary policy stance through the second quarter.

By accepting N2.41 trillion on the 133-day bill alone, the CBN appears to be extending the maturity structure of its OMO portfolio while limiting the risk of large near-term liquidity injections from maturing instruments.

Nevertheless, the N4.74 trillion SDF balance recorded on June 5 suggests that excess liquidity remains a major feature of Nigeria’s banking system despite the scale of recent liquidity withdrawals