Nigeria’s banking system liquidity remained above N8 trillion despite the Central Bank of Nigeria withdrawing N2.36 trillion through its Open Market Operations, signaling the continued abundance of funds in the financial system.
Mid-week data from the apex bank, following its OMO auction on March 23, 2026, show that the central bank’s aggressive intervention has had a limited immediate effect on overall market liquidity, highlighting the scale of ongoing inflows.
The CBN’s N2.36 trillion OMO issuance was aimed at aggressively sterilising system liquidity, which had opened the week above N8.06 trillion.
Opening balances on March 23 fell to a modest N85.04 billion, reflecting an immediate liquidity squeeze following the mop-up.
However, the tightening proved short-lived, as broader system liquidity rebounded to N7.98 trillion at the SDF window on Wednesday, March 25, 2026.
While OMO interventions of this magnitude are intended to drain excess funds, lift yields, and curb speculative pressures in the forex market, liquidity rebounded swiftly, underscoring the strength of ongoing inflows into the banking system.
A major driver of the high liquidity levels is the extensive use of the Standing Deposit Facility, where banks park surplus funds with the CBN.
Data shows SDF balances stood at N8.17 trillion at the start of the week on March 23, dipped slightly to N6.59 trillion on March 24, and then climbed back to N7.97 trillion by March 25.
The steady rise in SDF balances highlights banks’ preference for risk-free returns at the CBN window.
Persistent high deposits show that excess liquidity remains substantial despite OMO interventions, prompting analysts to suggest the need for more frequent and larger-scale mop-ups.
Nigeria’s banking system has seen a sustained surge in excess liquidity in recent weeks, with balances at the CBN deposit window rising above N8 trillion.
The build-up of idle funds has been driven largely by inflows from maturing securities and limited absorption through OMO auctions.
Banks have increasingly parked surplus funds in the SDF, attracted by its risk-free overnight interest rate of around 22.28 per cent.
The liquidity boost has also been supported by maturing instruments, including N1.44 trillion and N579.003 billion in securities.
