Nigeria banking liquidity rises amid projected ₦15.72tn September inflows

Nigeria’s banking system is experiencing a significant increase in liquidity. Financial system liquidity rose to ₦4.66 trillion in early September, up from ₦3.61 trillion the previous week. This surge was supported by approximately ₦2.3 trillion in primary market repayments and ₦4.4 trillion placed at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility.

The Financial Markets Dealers Association (FMDA) projects even larger inflows for September, estimating approximately ₦15.72 trillion in total inflows. This is driven largely by maturing Open Market Operation (OMO) bills, which are expected to account for ₦11.60 trillion, or about 74 per cent of the total. Other contributors include Treasury bills, FGN bond coupons, and Federation Account Allocation Committee (FAAC) allocations.

While liquidity has strengthened, the net impact on the market remains dependent on the CBN’s sterilization activities. Although overnight money-market rates eased to 22.13 per cent due to the surplus, some indicators like the Nigerian Interbank Offered Rate (NIBOR) moved higher, reflecting market expectations that liquidity conditions could tighten as the central bank continues its management operations.