The Central Bank of Nigeria (CBN) conducted a significant Open Market Operations (OMO) auction on June 5, 2026, successfully absorbing N3.04 trillion from the banking system. Investor demand across three tenors substantially exceeded the N600 billion offered by the apex bank.

Analysis of CBN OMO auction results and daily financial market data between June 2 and June 5, 2026, revealed total subscriptions amounting to N3.275 trillion. This represents an oversubscription rate of 5.46 times the amount offered, underscoring the CBN’s continued aggressive liquidity sterilisation strategy.

The latest auction follows two major OMO sessions in May that collectively absorbed trillions of naira from the financial system. Despite these efforts, excess liquidity in the banking system showed some signs of easing during the review period.

Auction Breakdown:

• The 7-day OMO bill received N179 billion in subscriptions against a N200 billion offer, with N169 billion allotted at a stop rate of 21.54%.
• The 35-day OMO bill attracted N614.43 billion in subscriptions compared to the N200 billion offered, with the CBN allotting N465 billion at a stop rate of 21.40%.
• The 133-day OMO bill was the most popular instrument, drawing N2.48 trillion in subscriptions against a N200 billion offer. The CBN allotted N2.41 trillion at a stop rate of 20.02%.
• In aggregate, the CBN offered N600 billion, received N3.275 trillion in subscriptions, and allotted N3.04 trillion, resulting in a net liquidity withdrawal of that amount.

The strong investor appetite, particularly for longer-dated instruments, indicates a growing willingness to lock in funds for extended periods, despite lower yields on some tenors. The 133-day bill’s 12.4-times oversubscription ratio highlights expectations of sustained monetary tightening.

Additional market activity during the week also contributed to reducing liquidity. Primary market operations on June 4 resulted in a net liquidity withdrawal of N992.68 billion, stemming from N1.46 trillion in NTB and FGN bond sales against repayments of N464.60 billion.

Opening balances for banks and discount houses saw a decline from N108.27 billion on June 2 to N45.14 billion on June 3, settling at N43.92 billion on June 5. This represents a reduction of approximately N64.35 billion, or 59.43%.

The Standing Deposit Facility (SDF) balance fluctuated, moving from N5.29 trillion on June 3 to N5.35 trillion on June 4, before easing to N4.74 trillion on June 5. This moderation suggests that liquidity conditions are beginning to tighten, though substantial excess funds remain in the system.

Outlook on Liquidity:

Despite the CBN’s aggressive sterilisation efforts, substantial liquidity inflows are anticipated in June. Financial Markets Dealers Association (FMDA) projections estimate total inflows of approximately N10.90 trillion into the banking system during June 2026. Of this, about N7.77 trillion is expected from maturing OMO bills.

The N3.04 trillion absorbed in the June 5 auction represents approximately 27.9% of the 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 reached approximately N30.12 trillion, reflecting the CBN’s intensive liquidity management.