The Central Bank of Nigeria (CBN) sterilized N7.18 trillion ($4.7 billion) from the banking system via Open Market Operations (OMO) in July. The total marked a 48.57% decline from June mop-ups.
According to official central bank market operation reports, the sharp drop in total liquidity drained was driven by a steep decline in auction frequency rather than a reduction in investor appetite.
The apex bank conducted only three OMO sales in July compared to seven auctions held in June. However, average allotment sizes expanded by 20.10% to reach N2.39 trillion per session.
Parallel primary market auctions for Nigerian Treasury bills recorded heavy oversubscription in late July, with 364-day stop rates easing 35 basis points to 17.35% as investor demand topped N3.38 trillion.
The reduced operational frequency coincides with the Monetary Policy Committee holding its benchmark interest rate at 26.5% in late July, following a slight moderation in headline inflation to 15.91%.
Consolidating liquidity drains into larger, less frequent issuances allows monetary authorities to minimize short-term borrowing costs while preserving elevated yield appeal for foreign portfolio investors and domestic institutions.
