By Boluwatife Oshadiya | June 3, 2026
Key Points
- CBN sold ₦7.30 trillion worth of OMO bills in May to manage excess liquidity in the financial system
- Strong investor demand for high-yield fixed-income securities supported oversubscription across auctions
- Net liquidity withdrawal of about ₦1.57 trillion was recorded despite ₦5.73 trillion in maturing OMO bills
Main Story
The Central Bank of Nigeria (CBN) raised ₦7.30 trillion through Open Market Operations (OMO) bill issuances in May 2026, intensifying efforts to control excess liquidity and maintain monetary stability amid persistent inflationary pressures.
According to a market report by Cowry Asset Management Limited, the apex bank’s liquidity management operations led to a net withdrawal of approximately ₦1.57 trillion from the financial system during the month. While ₦5.73 trillion flowed back into the market through maturing OMO bills, the CBN simultaneously issued fresh OMO instruments worth ₦7.30 trillion.
The report noted that investor appetite for OMO bills remained robust throughout May, driven by attractive yields and surplus liquidity across the banking system. Demand remained strong despite the CBN’s gradual efforts to moderate borrowing costs through tighter pricing across short-term fixed-income instruments.
Money market liquidity conditions remained broadly favourable during the period, supported by substantial inflows from maturing securities and sustained demand for sovereign debt instruments. System liquidity closed the final week of May at ₦6.02 trillion, up from ₦4.96 trillion recorded at the end of April.
The OMO market has remained one of the CBN’s primary tools for sterilising excess liquidity and supporting monetary policy transmission following a series of interest rate hikes aimed at containing inflation and stabilising the naira.
“The Nigerian money market maintained a broadly supportive liquidity environment throughout May, buoyed by substantial OMO maturities and sustained investor demand for sovereign fixed-income securities,” Cowry Asset Management stated in its monthly market review.
What’s Being Said
“The CBN’s sizeable liquidity sterilisation operations tempered the pace of yield moderation across the market,” Cowry Asset Management said.
Independent fixed-income analysts noted that strong investor demand continues to reflect confidence in high-yield government securities despite tightening liquidity management measures.
What’s Next
- Investors will closely monitor upcoming OMO auctions for signals on the CBN’s liquidity management strategy.
- Market participants are awaiting the next Monetary Policy Committee (MPC) meeting for guidance on interest rate direction.
- Inflation data and foreign exchange market developments are expected to influence future OMO issuance volumes.
Bottom Line
The Bottom Line: The CBN’s aggressive OMO operations underscore its commitment to controlling excess liquidity and supporting monetary stability. However, the sustained appetite for government securities suggests investors remain more attracted to fixed-income returns than riskier asset classes, potentially limiting liquidity flows into the broader economy.
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