Lagos, Nigeria – Nigeria’s banking system liquidity stayed above N8 trillion after the Central Bank of Nigeria pulled N2.36 trillion from the market via Open Market Operations. The data shows that excess funds remain high despite the central bank’s efforts to tighten conditions.
Okay News reports that the CBN conducted the OMO auction on March 23, 2026, to sterilise liquidity that opened the week at over N8.06 trillion. Initial balances dipped to just N85.04 billion, but system‑wide liquidity quickly rebounded to about N7.98 trillion by March 25.
A major reason for the high liquidity is the heavy use of the Standing Deposit Facility (SDF). Banks park surplus funds at the CBN’s SDF window because it offers a risk‑free overnight rate of roughly 22.28%. SDF balances rose from N8.17 trillion at the start of the week to about N7.97 trillion by mid‑week.
The inflow of idle cash comes from maturing securities, including instruments worth N1.44 trillion and N579.003 billion. With limited absorption through OMO auctions, banks keep moving excess funds into the SDF. This pattern suggests that additional and repeated mop‑ups may be needed to fully drain the system.
Analysts say persistently high liquidity can push up speculative pressure in the foreign‑exchange market and fuel inflation. The rebalancing of the banking system may require longer‑term reforms alongside frequent CBN interventions. Expectations are that the apex bank will continue using aggressive OMO operations to keep liquidity and rates under control.
