By Ayo Kehinde
Nigeria’s banking system liquidity remained above ₦8 trillion despite a ₦2.36 trillion mop-up by the Central Bank of Nigeria (CBN), highlighting persistent excess funds in the financial system.
Mid-week data following the CBN’s OMO auction on March 23, 2026, showed liquidity conditions tightened briefly but stayed elevated overall. The system opened the week with over ₦8.06 trillion, reflecting strong underlying inflows.
After the intervention, opening balances dropped sharply to ₦85.04 billion, indicating an immediate squeeze. However, analysts say the impact was short-lived, as liquidity levels rebounded quickly due to inflows from maturing instruments and fiscal disbursements.
The large OMO issuance underscores the CBN’s effort to sterilise excess liquidity and manage inflationary pressures. Still, the persistence of high system liquidity points to structural factors, including sustained government spending and limited absorption capacity in financial markets.
Interbank rates rose slightly following the mop-up but remained relatively stable, suggesting banks retained adequate funding buffers.
Market participants expect continued OMO auctions and complementary tools such as CRR debits to manage liquidity. Nonetheless, current trends indicate excess liquidity may persist in the near term, complicating efforts to tighten monetary conditions.
