The Central Bank of Nigeria (CBN) recorded N5.63 trillion in Open Market Operations (OMO) sales within two weeks after strong investor appetite overwhelmed its May 2026 auctions, with the 126-day bill emerging as the biggest attraction.
Between May 4 and May 12, the apex bank conducted three OMO auction sessions, offering a combined N1.8 trillion across eight instruments but allotting more than three times the amount due to heavy subscriptions.
Despite the aggressive liquidity mop-up, the CBN also repaid N4.78 trillion in maturing OMO bills during the period, leaving a net issuance of N850 billion.
Strong demand across auctions
At the May 4 auction, the 8-day bill attracted N1.07 trillion in subscriptions against a N300 billion offer and was fully allotted at a stop rate of 21.90%.
ALSO READ CBN raises N1.92trn at April 21 OMO auction, stop rates hit 21.9%
The 134-day bill recorded N640.1 billion in bids, with N630.1 billion allotted at 19.97%.
Total allotment for the session stood at about N1.7 trillion.
During the May 7 auction, the 33-day bill drew N674.4 billion in subscriptions, with N664.4 billion allotted at 21.57%, while the 96-day bill attracted N923.17 billion and recorded N893.17 billion in allotments at 20.45%.
Combined sales for the second session reached N1.60 trillion.
The May 12 auction produced the most notable outcome of the period as the 126-day bill generated the largest allotment.
Although initially offered at N200 billion, the instrument recorded N1.45 trillion in successful allotments at a stop rate of 20.10%, highlighting sustained institutional appetite for longer-dated OMO instruments.
In contrast, the 35-day bill saw heavy demand of N761 billion, but only N25 billion was allotted, indicating deliberate CBN restraint on short-term instruments.
The third auction session closed with total sales of N1.57 trillion.
Liquidity pressure persists
Analysts say the pattern reflects investor preference for longer-tenor instruments amid attractive yields and expectations of sustained tight monetary conditions.
Stop rates during the period remained within a narrow band, ranging from 21.90% for very short-term bills to 19.97% for longer-dated paper.
Despite the scale of OMO sales, banking system liquidity remained elevated.
The CBN recorded OMO repayments of N2.71 trillion on May 5 and another N2.07 trillion on May 12, while the Standing Deposit Facility (SDF) reportedly stayed above N4.5 trillion daily for most of the review period, underscoring persistent excess liquidity in the system.
OMO tightening intensifies in 2026
The latest auctions continue the CBN’s aggressive liquidity tightening stance in 2026.
Financial data show total OMO sales surged by about 426 per cent year-on-year, rising from N3.57 trillion in the first quarter of 2025 to N18.79 trillion in Q1 2026.
Cumulative OMO sales in the first four months of 2026 have now reached about N30.12 trillion, nearly matching Nigeria’s entire 2025 OMO sales figure.
At the April 21 auction alone, the apex bank raised N1.92 trillion after subscriptions exceeded the N600 billion offer, a trend that intensified in the May auctions.
Economists, however, warn that while sustained OMO mop-ups may help curb inflation and stabilise prices, persistently high yields could raise borrowing costs and slow credit expansion to the real economy.
