Nigerian banking system liquidity rises by N1.13 trillion
By the AFREEQUE newsroom, based on Business Day Nigeria
Liquidity in the Nigerian banking system rose by N1.13 trillion in a week, to N8.505 trillion, despite the Central Bank’s operations. According to the FMDA, the central bank withdrew N5.667 trillion through two OMO auctions.
Liquidity in the Nigerian banking system rose by N1.13 trillion in one week, to N8.505 trillion, according to the weekly report of the Financial Markets Dealers Association (FMDA) published on Monday. This rise of 15.36% occurred despite open market operations (OMO) by the Banque centrale du Nigeria (CBN), which withdrew N5.667 trillion in two auctions, on 3 and 6 November.
OMO operations involve selling securities to financial institutions to absorb excess liquidity and influence short-term interest rates. The Debt Management Office (DMO), for its part, limited its issuance of treasury bills at the auction of 4 November: it rejected about 75.1% of the N2.045 trillion in bids received and allocated only N509.401 billion, against an initial offer of N800 billion.
The system is expected to receive about N2.448 trillion in new inflows this week, including N2.298 trillion from maturing OMO securities. The DMO is due to return to the primary treasury bill market on 11 November with an offer of N800 billion.
