CBN, DMO cancel August 5 Treasury Bills auction after N4.69 trillion OMO auctions

The Central Bank of Nigeria (CBN), acting on behalf of the Debt Management Office (DMO), has cancelled its planned August 5 Treasury Bills (NTB) auction, just two days after mopping up a combined N4.69 trillion from the banking system through back-to-back Open Market Operations (OMO) auctions.

In a notice to authorized dealers, banks, investors and other market participants which was obtained by Nairametrics on Thursday, the apex bank confirmed that the auction previously billed for August 5 was withdrawn and would no longer hold.

However, the regulators added that all other auction dates on the N5.8 trillion Q3 2026 NTB Issuance Calendar remain unchanged and will proceed as scheduled.

The cancellation came just two days after the CBN issued an Invitation to Tender for N700 billion in Treasury Bills across the 91-day, 182-day and 364-day tenors, with bids originally expected to be received electronically through the CBN S4 Web Interface on August 5, with settlement on August 6, 2026.

What the regulators are saying:

Although the regulators did not offer any reason behind the cancelation of scheduled August 5 auction, Nairametrics learnt that the N4.69 trillion two-day OMO haul drained liquidity faster than the authorities expected.

• “The scale of liquidity the CBN pulled out of the system in the two sessions immediately preceding the cancellation appears central to the decision,” a market dealer and member of FMDA told Nairametrics on Thursday July 6, on condition of anonymity.
• The apex bank conducted its first Open Market Operation auctions of August on August 3 and 4, absorbing a combined N4.69 trillion in just two days:
• On August 3, the CBN mopped up N2.52 trillion via a 141-day OMO bill.
• A day later, on August 4, it absorbed a further combined N2.17 trillion across two tenors, the 112-day and 113-day bills.

This back-to-back haul, coming barely a week after the CBN had already allotted about N1.25 trillion against a N700 billion offer at its July 29 NTB auction, driven by extraordinary demand for the 364-day bill, suggests the apex bank may have concluded that pulling an additional N700 billion out of the system via Treasury Bills on August 5 risked over-tightening liquidity conditions just as OMO absorption was running well ahead of plan.

More insights:

The apex bank has not indicated whether the N700 billion offer will be rescheduled or absorbed into a later auction date.

• The withdrawn auction was one of six sessions flagged as the “largest auction sessions” in the CBN’s Q3 2026 NTB Issuance Programme, alongside July 8, July 29, August 12, August 26 and September 2, each expected to offer roughly N700 billion.
• The programme, unveiled in early July, set a total Q3 issuance target of N5.8 trillion, implying net new borrowing of about N3.16 trillion after accounting for maturing bills, more than four times the Q2 net target.

The 364-day bill alone was projected to account for N4.0 trillion, or about 69% of total planned Q3 issuance, reflecting sustained institutional appetite for one-year paper.

What you should know:

The apex bank had already drained N7.18 trillion from the banking system through OMO auctions in July alone.

• The N4.69 trillion absorbed on August 3 and 4 pushed cumulative OMO sterilisation for the two-month stretch to well above N11.8 trillion.
• Combined with heavy Treasury Bills demand at the July 29 auction, this suggests system liquidity may already be considerably tighter than the CBN’s Q3 programme initially projected, potentially prompting the decision to pause rather than press ahead with a third major mop-up in under a week.
• Market participants who had positioned for the August 5 session will now need to await guidance on whether the offer is rescheduled or folded into the next auction date on the calendar.

With the 364-day NTB bill alone carrying a N4.0 trillion target for the quarter, the cancellation raises the question of how the CBN intends to make up the shortfall from the withdrawn N700 billion offer, whether through an upsized allotment at the next scheduled auction, or a broader recalibration of the Q3 calendar depending on how liquidity conditions evolve in the coming weeks.