CBN Faces N10.90 Trillion Liquidity Surge in June on N7.77 Trillion OMO Maturities

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The Central Bank of Nigeria (CBN) is set to confront renewed liquidity management pressures in June 2026 as Nigeria’s financial system is projected to receive N10.90 trillion in inflows, driven largely by maturing Open Market Operations (OMO) bills.

According to the Financial Markets Dealers Association (FMDA) Monthly Market Report published on June 1, June’s projected inflows represent a 3.51% increase from the N10.53 trillion recorded in May. The development comes despite the apex bank’s aggressive liquidity tightening efforts last month.

The CBN withdrew an estimated N12.06 trillion from the financial system through liquidity management operations in May. However, average system liquidity still expanded by 7.76% to N5.22 trillion, highlighting the persistent challenge of containing excess liquidity amid large recurring inflows.

The FMDA report indicates that OMO maturities will remain the dominant source of liquidity inflows into the financial system during June. The N7.77 trillion expected from maturing OMO bills accounts for approximately 71% of total projected inflows for the month.

Breakdown of the projected N10.90 trillion inflows includes:

• OMO maturities: N7.77 trillion (up from N7.17 trillion in May)
• FAAC disbursements: N1.80 trillion
• Treasury Bills maturities: N995.81 billion
• FGN bond coupons: N278.99 billion
• Corporate bond maturities: N49.04 billion
• Commercial paper maturities: N10.46 billion

“Under normal circumstances, a withdrawal of N12 trillion would be expected to significantly reduce liquidity. However, the fact that average liquidity still rose to N5.22 trillion suggests that liquidity injections into the system remained strong,” the FMDA analysts noted.

The Standing Deposit Facility (SDF) closed May at N5.89 trillion on May 29, reflecting continued excess reserves within the banking system.

Nigeria’s N20.12 trillion budget deficit for 2026 is expected to be financed largely through domestic borrowing. Cumulative OMO sales between January and April 2026 reached approximately N30.12 trillion.

FMDA noted that strong liquidity conditions are expected to support investments in fixed-income securities and ease funding pressures. Meanwhile, foreign exchange turnover exceeded $8 billion in May, while external reserves increased by more than $1 billion during the month.

The naira depreciated marginally against the dollar despite the elevated FX turnover, as demand pressures persisted in the foreign exchange market.

Sources: Nairametrics, BusinessDay