CBN Drains N1.69 Trillion in Fierce Liquidity Mop-Up as Investors Rush Long-Term OMO Bills

The Central Bank of Nigeria stepped up its liquidity control measures on June 8, 2026, draining a massive N1.69 trillion from the financial system through its Open Market Operations (OMO) auction. The move reflects the apex bank’s ongoing effort to tighten money supply and manage inflationary pressures in the Nigerian economy.

Although the CBN offered a total of N600 billion across two instruments—an 8-day bill and a 134-day bill—investor demand surged far beyond expectations, hitting N1.689 trillion. However, the appetite was not evenly spread, as market participants overwhelmingly favoured the longer-dated securities over the short-term option.

The 8-day OMO bill recorded weak demand, attracting just N85 billion against a N300 billion offer, while the 134-day bill was heavily oversubscribed with over N1.6 trillion in subscriptions. Investors appeared to prefer locking in returns for a longer period, even as the shorter bill offered slightly higher yields of up to 21.89% compared to 20.02% on the longer tenor.

This unusual pricing and demand pattern highlights a key market sentiment: investors are prioritising stability and sustained returns over short-term gains. By accepting all subscriptions, the CBN effectively withdrew excess liquidity from circulation, reinforcing its aggressive stance on monetary tightening and exchange rate stability.

Compared with previous sessions, the June 8 auction was smaller than May’s record-breaking mop-ups but still significant in scale. Earlier interventions had seen trillions drained in single auctions, signalling that liquidity remains abundant in Nigeria’s financial system despite repeated tightening efforts. Analysts suggest the trend may continue as the CBN works to anchor inflation and stabilize market conditions.

source: nairametrics