The Central Bank of Nigeria (CBN) has reported a N930 billion drop in banking system liquidity, bringing the balance down to N3.66 trillion from the N6.81 trillion recorded on Aug. 11.
The apex bank attributed the contraction to settlement obligations from its latest Treasury Bills auction, according to money-market data published on its website on Friday. Despite the drop, the CBN confirmed that the financial system remains in a comfortable surplus.
The liquidity drain spurred minor adjustments in money-market rates:
Overnight Lending Rate: Ticked up by two basis points to 22.20 per cent, compared to 22.18 per cent on Aug. 11.
Open Repo (OBB) Rate: Held steady at 22.00 per cent.
The current liquidity level marks a shift from mid-August’s peak surplus, which was buoyed by a massive N2.48 trillion inflow from maturing Open Market Operations (OMO) securities.
Aggressive Liquidity Management
The CBN continues to heavily utilize OMO and Treasury Bills auctions to absorb excess system cash. High investor demand characterized the bank’s Aug. 26 issuances:
| Auction Instrument | Amount Offered | Total Subscriptions | Final Allotment |
| OMO Bills | N1.00 trillion | N4.26 trillion | N2.80 trillion |
| Treasury Bills | N700.00 billion | N3.79 trillion | N762.89 billion |
Framework Reforms Boost Access
In tandem with its liquidity mop-up, the central bank overhauled its operational framework in August to deepen financial market participation and improve market functioning. Key policy shifts include:
Expanded OMO Access: Individuals, corporate entities, and non-bank financial institutions can now trade in both primary and secondary OMO markets via Deposit Money Banks.
Tenored Repo Operations Restored: The CBN lifted its suspension on repurchase transactions, allowing DMBs to access tenors ranging from four to 90 days.
Market liquidity opened Friday at N3.66 trillion, reflecting sustained financial system stability despite the central bank’s tightening measures.
