By Mariam Abeeb
The Central Bank of Nigeria has withdrawn about N6.88 trillion from the financial system through Open Market Operations in the first two weeks of June, in a move aimed at tightening liquidity and curbing inflationary pressures.
Analysis of financial data published by the apex bank at the close of business on June 11 showed that the amount absorbed represents about 63 per cent of the N10.90 trillion projected to flow into the banking system this month.
The aggressive liquidity mop-up followed expectations of substantial inflows, particularly from maturing OMO bills estimated at N7.77 trillion, according to figures released by the Financial Markets Dealers Association.
The development underscores the CBN’s determination to prevent excess liquidity from fuelling inflation at a time when monetary authorities remain focused on price stability.
Data from OMO auctions conducted on June 2, 8 and 11 indicated that investors showed stronger preference for longer-tenor instruments, especially those exceeding 130 days, despite shorter-dated bills offering higher stop rates.
The figures revealed that total subscriptions exceeded N7.2 trillion, reflecting sustained appetite for high-yield OMO instruments by investors seeking attractive returns.
Stop rates during the period ranged between 19.98 per cent and 21.89 per cent, suggesting that yields remained elevated even in the face of overwhelming demand.
At the June 2 auction, the 133-day OMO bill attracted subscriptions worth N2.482 trillion, more than 12 times the N200 billion initially offered by the CBN.
The apex bank eventually allotted N2.409 trillion under the same instrument, making it the largest single liquidity withdrawal recorded during the review period.
Similarly, a 134-day OMO auction held on June 8 drew subscriptions of N1.605 trillion, with the entire amount allotted to successful bidders.
Another 138-day OMO bill recorded subscriptions of N1.84 trillion, accounting for a significant share of investor demand during the period.
Analysts say the trend reflects confidence in OMO instruments and the attractiveness of current yields, even as the CBN intensifies efforts to manage liquidity conditions and keep inflationary pressures in check.
