The Central Bank of Nigeria (CBN) reduced the amount of money it removed from the banking system through Open Market Operations (OMO) in July, following a cut in the number of auctions held during the month.
CBN data showed that the apex bank mopped up N7.18 trillion in July 2026, down by 48.6 percent from the N13.96 trillion it absorbed in June.
The decline was mainly because the CBN held only three OMO auctions in July—on July 13, 14 and 28—compared with seven auctions in June. Although there were fewer auctions, each one was larger than those conducted in the previous month.
Market analysts said the CBN appears to have changed its strategy by holding fewer auctions while selling larger volumes of OMO bills to keep excess cash out of the financial system.
The biggest sale came on July 28, when the CBN allotted N3.5 trillion, the largest single OMO auction recorded in both June and July.
Investor demand remained strong despite the fewer auctions.
The CBN offered N600 billion at each of the three July auctions, for a total offer of N1.8 trillion. However, investors submitted bids worth about four times the amount offered, showing continued strong demand for the high-yield securities.
June also recorded strong investor interest. The CBN offered N4.2 trillion across seven auctions but received bids worth about N15.27 trillion. It eventually allotted N13.96 trillion, representing about 91.4 percent of the total subscriptions.
The June 2, auction attracted the highest demand, with investors bidding N2.15 trillion, out of which N2.01 trillion was allotted. The June 8, auction recorded the lowest subscription of N1.73 trillion, while the June 29 and 30 auctions also attracted strong demand.
The 127-day OMO bill remained the most popular instrument among investors during both months. On July 13 alone, it attracted N1.854 trillion in bids.
During the period, stop rates ranged from 20.39 percent to 22.65 percent, with shorter-term bills attracting higher yields than longer-term instruments.
Analysts said the CBN’s latest approach does not signal an end to its tight monetary policy. Instead, they believe the bank is using fewer but bigger auctions to manage liquidity more efficiently.
They added that the continued oversubscription of OMO auctions shows investors are still willing to invest heavily in the securities despite expectations that interest rates could ease later in the year.
OMO bills are one of the CBN’s main tools for controlling the amount of money in the banking system and influencing short-term interest rates. Unlike Treasury Bills issued by the Debt Management Office to finance government spending, OMO bills are issued solely by the CBN to manage liquidity.
Between January and May, the CBN sold more than N30.12 trillion worth of OMO bills. Adding June’s N13.96 trillion and July’s N7.18 trillion brings total OMO sales this year to more than N50 trillion.
Attention is now on the CBN’s August auction schedule as investors watch to see whether the apex bank will continue with its strategy of fewer but larger OMO auctions or reduce the pace of liquidity mop-up as Treasury Bills and Federal Government bond auctions compete for investors’ funds.
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