The Central Bank of Nigeria (CBN) is expected to face renewed challenges in managing excess liquidity in the financial system as projected inflows for June 2026 rise to N10.90 trillion, driven largely by maturing Open Market Operations (OMO) bills.
According to the Financial Markets Dealers Association (FMDA) Monthly Market Report, total inflows into the financial system this month are projected to increase by 3.51 per cent from the N10.53 trillion recorded in May.
The anticipated liquidity injection comes despite the apex bank’s aggressive monetary tightening efforts in May, during which an estimated N12.06 trillion was withdrawn from the financial system through various liquidity management operations. Nevertheless, average system liquidity expanded by 7.76 per cent to N5.22 trillion, underscoring the persistent challenge of containing excess liquidity amid substantial recurring inflows.
The report identified maturing OMO bills as the primary source of liquidity entering the system in June. OMO maturities are projected to reach N7.77 trillion, up from N7.17 trillion in May, accounting for approximately 71 per cent of the total expected inflows for the month.
Federation Account Allocation Committee (FAAC) disbursements are projected at N1.80 trillion, while Treasury Bills maturities are expected to contribute N995.81 billion to system liquidity.
Additional inflows are expected from fixed income instruments, including Federal Government of Nigeria bond coupon payments estimated at N278.99 billion. Corporate bond maturities and commercial paper maturities are projected at N49.04 billion and N10.46 billion, respectively.
The projected surge in liquidity is likely to keep pressure on the CBN’s monetary management strategy as it seeks to maintain price stability and contain inflationary risks while balancing liquidity conditions in the banking sector.
Market participants will be closely monitoring the apex bank’s response in the coming weeks, particularly through OMO auctions and other liquidity sterilisation measures, as the sizeable inflows test the effectiveness of its tightening stance.
