The Central Bank of Nigeria, acting on behalf of the Debt Management Office, has cancelled its planned August 5, 2026, Treasury Bills auction. This decision came just two days after the apex bank mopped up a combined N4.69 trillion from the banking system through back-to-back Open Market Operations auctions.
In a notice to authorized dealers, banks, investors, and other market participants, the central bank confirmed that the auction previously scheduled for August 5 was withdrawn and would no longer hold. However, the regulators added that all other auction dates on the N5.8 trillion Q3 2026 Treasury Bills Issuance Calendar remain unchanged and will proceed as scheduled.
The cancellation occurred shortly after the central bank issued an Invitation to Tender for N700 billion in Treasury Bills across the 91-day, 182-day, and 364-day tenors. Bids were originally expected to be received electronically through the CBN S4 Web Interface on August 5, with settlement on August 6, 2026.
Although the regulators did not offer an official reason for the cancellation, market sources indicate that the N4.69 trillion two-day OMO haul drained banking system liquidity faster than authorities expected. A market dealer and member of the Financial Markets Dealers Association told Nairametrics on Thursday, July 6, on condition of anonymity, that the scale of liquidity pulled out of the system in the two sessions immediately preceding the cancellation appeared central to the decision.
The central bank conducted its first OMO auctions of August on August 3 and 4, absorbing a combined N4.69 trillion in just two days. On August 3, the apex bank mopped up N2.52 trillion via a 141-day OMO bill. A day later, on August 4, it absorbed a further N2.17 trillion across two tenors, specifically the 112-day and 113-day bills.
This back-to-back haul came barely a week after the central bank had already allotted about N1.25 trillion against a N700 billion offer at its July 29 Treasury Bills auction, driven by extraordinary demand for the 364-day bill. Analysts suggest that pulling an additional N700 billion out of the system on August 5 risked over-tightening liquidity conditions just as OMO absorption was running well ahead of plan.
The apex bank has not indicated whether the N700 billion offer will be rescheduled or absorbed into a later auction date. The withdrawn auction was one of six sessions flagged as the largest auction sessions in the Q3 2026 Treasury Bills Issuance Programme, alongside July 8, July 29, August 12, August 26, and September 2, each expected to offer roughly N700 billion.
The Q3 programme, unveiled in early July, set a total Q3 issuance target of N5.8 trillion, implying net new borrowing of about N3.16 trillion after accounting for maturing bills. The 364-day bill alone was projected to account for N4.0 trillion, or about 69% of total planned Q3 issuance, reflecting sustained institutional appetite for one-year paper.
Prior to this, the central bank had already drained N7.18 trillion from the banking system through OMO auctions in July alone. The N4.69 trillion absorbed on August 3 and 4 pushed cumulative OMO sterilisation for the two-month stretch to well above N11.8 trillion.
Combined with heavy Treasury Bills demand at the July 29 auction, this suggests system liquidity may already be considerably tighter than the Q3 programme initially projected. Market participants who had positioned for the August 5 session must now await guidance on whether the offer is rescheduled or folded into the next auction date on the calendar.
