The Central Bank of Nigeria (CBN) has withdrawn approximately N6.88 trillion from the financial system through Open Market Operations (OMO) auctions in the first two weeks of June 2026, as it intensifies efforts to manage liquidity and curb inflationary pressures.

Data published by the apex bank at the close of business on June 11, 2026, and analysed by Nairametrics, shows that the liquidity mop-up represents about 63 per cent of the total projected inflows for the month, underscoring the scale of the CBN’s ongoing sterilisation operations.

The aggressive intervention comes against a backdrop of projected inflows of N10.90 trillion into the financial system in June, according to the Financial Markets Dealers Association (FMDA). Of this amount, N7.77 trillion is expected from OMO maturities alone, raising concerns over potential excess liquidity in the banking system.

Auction data from the first and second weeks of June indicate sustained investor appetite for high-yield government securities, particularly longer-tenor instruments.

The CBN conducted OMO auctions on June 2, 8, and 11, recording total successful allotments of N6.88 trillion from investor subscriptions exceeding N7.2 trillion.

Stop rates during the period ranged between 19.98 per cent and 21.89 per cent, reflecting persistently elevated yields despite tight monetary conditions.

Demand was particularly strong for longer-dated instruments. The June 2 auction saw a 133-day OMO bill attract subscriptions of N2.482 trillion—more than 12 times the N200 billion offered. The CBN eventually allotted N2.409 trillion on the instrument, marking the largest single liquidity withdrawal in the review period.

Similarly, a 134-day bill sold on June 8 recorded subscriptions of N1.605 trillion, which was fully allotted, while a 138-day instrument attracted N1.84 trillion in subscriptions, accounting for a significant share of overall demand.

In contrast, shorter-tenor instruments attracted weaker interest despite relatively higher stop rates, highlighting investor preference for longer-dated securities amid expectations of sustained high yields.

Despite the CBN’s aggressive mop-up efforts, system liquidity conditions remain robust. The apex bank had already withdrawn an estimated N12.06 trillion in May, yet average system liquidity still rose to N5.22 trillion, indicating persistent cash availability within the banking system.

The FMDA projection shows that June inflows will be driven largely by N7.77 trillion in OMO maturities, accounting for about 71 per cent of total expected inflows. Additional inflows include N1.80 trillion from Federation Account Allocation Committee (FAAC) disbursements and nearly N1 trillion from Treasury Bills maturities.

These inflows, combined with strong investor demand for fixed-income securities, continue to support elevated subscription levels across OMO auctions.

With more than half of June’s projected inflows already sterilised within the first two weeks, market participants expect the CBN to sustain its active presence in the money market through the remainder of the month.

Analysts note that while the central bank has made significant progress in absorbing excess liquidity relative to projected inflows, additional injections into the system before month-end could still necessitate further sterilisation measures to maintain monetary stability and contain inflationary pressures. (Arise News)

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