Excess liquidity at Nigerian banks rises to 6.28 trillion naira
By the AFREEQUE newsroom, based on Punch
Excess liquidity in Nigerian banks reached 6.28 trillion naira at the end of the week, up from 3.71 trillion a week earlier. Nearly 4.9 trillion naira in additional inflows is expected this week, including federal allocations and maturing bills, according to Punch.
Excess liquidity in Nigeria’s banking system reached 6.28 trillion naira at the end of last week, up from 3.71 trillion naira a week earlier, Punch reports. The 69.3% increase was driven in part by the maturity of Central Bank of Nigeria (CBN) bills and banks’ deposits with the institution.
Funds released from maturing open market operation securities added 2.41 trillion naira to the market. Banks’ average deposits with the CBN through its deposit facility reached about 4 trillion naira during the week. The increased liquidity eased some short-term funding pressures, but money-market rates remained high.
Nearly 4.9 trillion naira in additional inflows was expected this week: 2.43 trillion naira in allocations to states, 2.07 trillion naira in maturing open market operation bills and 399 billion naira in Nigerian Treasury bills. Settlement of the federal government’s bond issue could, however, absorb some of these funds.
Analysts expect the CBN to issue more open market operation bills to withdraw some excess liquidity and limit the fall in short-term rates. This follows reports on 30 September of banks depositing 6.28 trillion naira with the CBN, amid high banking liquidity.
Summary produced with the help of artificial intelligence tools, under AFREEQUE’s editorial responsibility.
