Nigeria’s fixed-income market is expected to witness stronger liquidity conditions in May 2026 as an estimated N10.53 trillion is projected to flow into the financial system. The forecast was released by the Financial Markets Dealers Association in its Monthly Market Report published on May 5, 2026.
The expected inflow represents an increase from the N9.08 trillion recorded in April, showing that more funds are likely to circulate within the financial market this month. Analysts believe the development could influence interest rates, investment decisions, and activities in the bond and treasury markets.
According to the report, Open Market Operations maturities will remain the biggest source of liquidity inflows in May. OMO bills issued by the Central Bank of Nigeria continue to play a major role in controlling liquidity within the economy, and their maturities often release large amounts of cash back into the banking system.
The FMDA projected that OMO maturities will contribute about N7.17 trillion in May. This is significantly higher than the N5.88 trillion recorded in April and makes OMO bills the largest contributor to the expected inflows.
Treasury bill repayments are also expected to rise sharply during the month. The report estimated Treasury bill maturities at N1.05 trillion, compared to N722.72 billion recorded in April. This increase is expected to provide additional liquidity support across the financial market.
Meanwhile, inflows from the Federation Account Allocation Committee are projected at N1.8 trillion for May. Although this figure is slightly lower than the N2.04 trillion shared in April, it remains one of the major contributors to liquidity in the economy.
Federal Government bond coupon payments are also expected to inject funds into the system. The report projected coupon payments at N346.14 billion for May, slightly below the N357.61 billion paid in April. However, no Federal Government bond maturities are scheduled for the month.
Despite the absence of bond maturities, the coupon payments are expected to support institutional investors such as pension fund administrators, insurance firms, and asset managers who depend on regular fixed-income returns.
The report also noted that activities in the corporate debt market will contribute to the overall liquidity expansion. Corporate bond coupon payments are projected to rise significantly to N95.09 billion in May, compared to N19.92 billion recorded in April.
In addition, corporate bond maturities, which were absent in April, are expected to contribute N10.45 billion to total inflows this month. Commercial paper maturities are forecast at N59.50 billion, remaining close to the N61.61 billion recorded previously.
Although corporate debt inflows are smaller compared to government-related securities, they are still expected to support market liquidity and encourage investors to reinvest in higher-yielding corporate instruments.
The April liquidity performance also strengthened confidence in the May projection. FMDA had earlier projected inflows of N8.84 trillion for April, but the actual figure later rose to N9.08 trillion.
OMO maturities accounted for the largest share of April inflows at N5.88 trillion, while Treasury bills, FAAC disbursements, bond coupon payments, and commercial paper maturities also contributed significantly.
With liquidity expected to remain strong in May, market experts believe investors may begin adjusting their portfolios while yields in the fixed-income market could gradually decline due to increased cash availability.
The projected N10.53 trillion inflow highlights the continued importance of OMO bills and Treasury instruments in driving liquidity across Nigeria’s financial system.
