CBN Siphons N1.945 Trillion to Stabilise Prices and Curb Inflation

The Central Bank of Nigeria mopped up N1.945 trillion from the financial system in its May 29, 2026 Open Market Operations (OMO) auction as it sought to sterilise excess liquidity ahead of an anticipated N3.35 trillion inflow from maturing OMO and Treasury Bills securities.

The latest OMO auction results indicate strong demand for short term government securities as investors submitted bids worth N1.952 trillion against a total offer size of N400 billion.

The auction comes just a week after the apex bank conducted a much larger OMO sale on May 21, when it allotted N3.47 trillion against subscriptions of N3.48 trillion, bringing total OMO liquidity mop-ups within eight days to N5.42 trillion.

The latest auction details reflect sustained robust demand for short-term government securities as the CBN continues its aggressive liquidity management operations to stabilise inflationary pressures and support exchange rate stability.

The auction on May 29 was for two OMO instruments, with the 102-day and 11-day bills seeing good investor participation across maturities.

Market participants subscribed massively as total subscription stood at N1.952 trillion against an offer of N400 billion while total allotment was N1.945 trillion.

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

Subscriptions for the 11-day bill stood at N225 billion against the offer of N200 billion, and N220 billion was allotted at a stop rate of 21.80 percent.

The auction did not include repayments, pointing to a pure liquidity absorption exercise by the apex bank.

The May 29 auction was smaller than the May 21 exercise but investor appetite remained strong across tenors.

The CBN offered N700 billion in three tenors on May 21 but got subscriptions of N3.477 trillion. Total allotments for the May 21 auction were N3.47 trillion.

The two auctions together raised N5.42 trillion in a little over a week, highlighting the Central Bank of Nigeria’s commitment to tighten liquidity conditions as it continues its efforts to manage inflation and foreign exchange.

Analysts at Cowry Asset Management Limited expect large maturities of about N2.72 trillion in OMO bills and N631.46 billion in Treasury Bills in the first week of June.

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

The analysts said that the large maturity profile would provide strong demand for the upcoming fixed income auctions if the apex bank continues with its liquidity management strategy.

The sustained mop-up of liquidity is consistent with the CBN’s overall monetary policy tightening stance to manage inflation expectations and mop up excess cash in the banking system, which has remained high due to maturing instruments and fiscal-related inflows.

Market analysts say such operations help anchor short-term interest rates and improve transmission of monetary policy decisions across the financial system.

But they also say aggressive liquidity sterilization may keep funding costs elevated for banks and corporate borrowers in the near term.

However, the high return on OMO bills relative to other short-term investment opportunities in the local market has kept the demand for the instrument high among investors.

Cowry Asset Management Limited said the expected large maturity wave in early June might provide a short-term boost to system liquidity as the CBN maintains its sterilisation efforts.

According to Nairametrics, the persistent involvement in OMO auctions indicates rising investor appetite for risk-free government securities in the face of current macroeconomic uncertainties and inflationary pressures.

Liquidity conditions in the Nigerian financial system in the coming weeks would be determined by the interaction of large maturities and aggressive mop-up operations, with possible implications for short-term interest rates and stability of the currency.

As liquidity dynamics evolve, market operators in the financial system are expected to keep an eye on the Treasury Bill auctions and CBN open market interventions, especially as seasonal fiscal flows, debt maturities and monetary policy adjustments continue to interact to shape market sentiment across fixed income and foreign exchange segments. There is heightened vigilance from investors and policymakers alike as market conditions remain fluid and data dependent environment.