The Central Bank of Nigeria (CBN) is expected to face renewed liquidity management pressure in June 2026 as the financial system is projected to receive N10.9 trillion in inflows, largely driven by maturing Open Market Operations (OMO) bills.
This is according to the Financial Markets Dealers Association (FMDA) Monthly Market Report published on June 1, which showed that projected inflows for June represent a 3.51 per cent increase from the N10.53 trillion recorded in May.
The development comes despite the apex bank’s aggressive liquidity tightening measures in May, during which it withdrew an estimated N12.06 trillion from the financial system.
However, average system liquidity still rose by 7.76 per cent to N5.22 trillion, underscoring the difficulty of containing excess liquidity amid recurring large inflows.
According to the FMDA report, OMO maturities will remain the largest source of liquidity inflows in June. The N7.77 trillion expected from maturing OMO bills accounts for about 71 per cent of the total projected inflows for the month.
Total projected inflows for June 2026 stand at N10.9 trillion, compared to N10.53 trillion in May.
OMO maturities are projected at N7.77 trillion, up from N7.17 trillion recorded in May, making them the dominant contributor to liquidity inflows.
FAAC disbursements are expected to contribute N1.80 trillion, while Treasury Bills maturities are projected at N995.81 billion.
FGN bond coupon payments, corporate bond maturities and commercial paper maturities are estimated at N278.99 billion, N49.04 billion and N10.46 billion, respectively.
The figures highlight the cyclical nature of liquidity management in Nigeria, where OMO instruments used to absorb excess liquidity eventually mature and inject substantial cash back into the banking system, forcing the CBN to undertake fresh sterilisation measures.
Liquidity data for May provides further insight into the scale of the challenge facing monetary authorities in June.
Despite withdrawing an estimated N12.06 trillion through liquidity management operations in May, average system liquidity increased by 7.76 per cent to N5.22 trillion.
The Standing Deposit Facility (SDF) closed at N5.89 trillion on May 29, reflecting continued excess reserves within the banking system.
Banks also continued to deposit significant surplus funds with the CBN overnight, indicating that liquidity levels remained elevated despite aggressive tightening efforts.
The projected N7.77 trillion OMO maturities in June suggest that the CBN may need to match or even exceed May’s liquidity mop-up operations to maintain current market conditions.
In addition, the projected N1.80 trillion FAAC disbursement is expected to inject more liquidity into the economy, further complicating efforts to manage excess system funds.
Nigeria’s broader fiscal and monetary environment continues to sustain elevated liquidity levels within the financial system.
The country’s N20.12 trillion budget deficit for 2026 is expected to be financed largely through domestic borrowing, creating additional liquidity through government spending.
Cumulative OMO sales between January and April 2026 reached approximately N30.12 trillion, highlighting the scale of the CBN’s sterilisation efforts.
The FMDA noted that strong liquidity conditions are expected to support investments in fixed-income securities and ease funding pressures in the interbank market.
The association also disclosed that foreign exchange turnover exceeded $8 billion in May, while external reserves increased by more than $1 billion during the month.
FMDA advised investors to position their portfolios to benefit from elevated liquidity conditions and the significant inflows expected in June, while maintaining prudent foreign exchange risk management strategies amid lingering uncertainties in the currency market.
