The Central Bank of Nigeria (CBN), acting on behalf of the Debt Management Office (DMO), has cancelled the N700 billion Treasury Bills auction scheduled for August 5, 2026, after aggressively draining liquidity from the banking system through back-to-back Open Market Operations (OMO).
The cancellation came just two days after the apex bank mopped up a combined N4.69 trillion through OMO auctions conducted on August 3 and 4.
In a notice to authorised dealers, banks, investors and other market participants, the CBN said the August 5 Treasury Bills auction would no longer hold.
However, the authorities maintained that other dates in the N5.8 trillion Treasury Bills issuance programme for the third quarter of 2026 remain unchanged.
The withdrawn auction had offered N700 billion across 91-day, 182-day and 364-day Treasury Bills, with bids originally scheduled to be submitted electronically through the CBN S4 Web Interface.
Although the CBN did not give an official reason for the cancellation, market indications point to tightening liquidity conditions following the unusually large OMO interventions.
The apex bank absorbed N2.52 trillion through a 141-day OMO bill on August 3, followed by another N2.17 trillion through 112-day and 113-day instruments the next day.
A market dealer told Nairametrics that the scale of the liquidity withdrawal immediately preceding the Treasury Bills auction appeared to have influenced the decision.
The move also followed strong demand at the July 29 Treasury Bills auction, where the CBN allotted about N1.25 trillion against an initial N700 billion offer, largely driven by demand for the 364-day instrument.
CBN weighs liquidity pressure
The latest intervention adds to the CBN’s aggressive liquidity-management operations.
The apex bank had already withdrawn N7.18 trillion from the banking system through OMO auctions in July. The additional N4.69 trillion absorbed in the first two OMO sessions of August pushed cumulative sterilisation over the two-month period above N11.8 trillion.
The cancellation therefore suggests that monetary authorities may be seeking to prevent excessive tightening of banking-system liquidity while continuing to manage short-term interest rates and inflationary pressures.
The N700 billion Treasury Bills offer has not yet been assigned a new auction date. It could either be rescheduled or incorporated into a subsequent auction.
The cancelled session was one of six major N700 billion auction windows included in the Q3 2026 issuance calendar. The other major dates are August 12, August 26 and September 2, alongside the July 8 and July 29 auctions.
The Q3 programme targets N5.8 trillion in Treasury Bills issuance, representing projected net new borrowing of about N3.16 trillion after accounting for maturing securities.
The 364-day Treasury Bill is expected to account for about N4 trillion, or 69 per cent of planned quarterly issuance, reflecting strong institutional demand for longer-term government securities.
With the August 5 auction now withdrawn, attention will turn to whether the CBN and DMO increase allotments at subsequent auctions to compensate for the N700 billion shortfall or adjust the borrowing schedule in response to liquidity conditions.
