The Central Bank of Nigeria (CBN) recorded a net liquidity withdrawal of N1.569 trillion in May 2026 after draining N7.303 trillion through Open Market Operations (OMO) and primary market activities, while injecting N5.734 trillion via maturing instruments.
The move reflects the apex bank’s sustained monetary tightening strategy aimed at reducing excess liquidity and curbing inflationary pressures.
CBN financial market data covering May 7 to May 29 showed that OMO operations dominated liquidity management during the month.
The largest operation occurred on May 21 when the apex bank conducted a N3.692 trillion OMO auction, fully allotting subscriptions across 33-day and 138-day tenors valued at N1.525 trillion and N2.168 trillion respectively.
Earlier, the CBN had carried out a N2.050 trillion OMO sale on May 15, tightening liquidity conditions and pushing Standing Deposit Facility (SDF) balances lower.
However, liquidity briefly improved on May 19 following the repayment of N2.247 trillion in maturing OMO bills before the CBN returned to the market with another aggressive mop-up exercise on May 21.
Primary market operations also contributed to liquidity tightening, with sales worth N731.75 billion and N829.33 billion recorded on May 7 and May 21 respectively.
At the end of the month, OMO activities accounted for a net withdrawal of N1.525 trillion, while primary market operations produced an additional net withdrawal of about N44 billion.
Overall, the banking system recorded total liquidity withdrawals of N7.303 trillion against injections of N5.734 trillion.
Analysts said the pattern highlights the CBN’s determination to neutralise liquidity inflows from maturing instruments and maintain tight monetary conditions.
SDF balances fell to a low of N2.70 trillion on May 22 before rebounding to N5.89 trillion by month-end as banks redeposited excess funds with the apex bank.
The data also showed that cumulative OMO sales between January and April 2026 stood at about N30.12 trillion, underscoring the scale of the CBN’s liquidity sterilisation efforts.
Analysts further noted that the Federal Government’s N20.12 trillion budget deficit for 2026, largely financed through domestic borrowing, continues to increase naira liquidity within the financial system.
Market projections indicate that about N2.04 trillion from maturing OMO bills could enter the banking system in early June, potentially prompting fresh liquidity mop-up operations by the CBN.
