The liquidity of the Nigerian banking system significantly improved on Wednesday, leading to a decline in short-term financing rates, according to the Nigerian asset management and financial services company AIICO Capital Limited.
Throughout the session, the liquidity surplus increased by approximately 1.940 trillion nairas (equivalent to 1.45 billion USD), up by 35.53%. This growth was driven by bond coupon receipts and increased bank placements with the Central Bank of Nigeria (CBN).
The improved availability reduced the reliance of banks on the CBN’s Standing Lending Facility, the central bank’s marginal lending window. No drawdowns were recorded during the session, which helped ease tensions in the money market.
However, liquidity conditions remain dependent on CBN operations. Nearly 2.320 trillion nairas of Open Market Operations (OMO) securities are set to mature, potentially injecting additional funds into the system. In parallel, an OMO auction allowed the central bank to absorb around 2.800 trillion nairas (2.1 billion dollars).
These operations demonstrate the CBN’s commitment to maintaining liquidity at a level consistent with its rate objectives, even as banks currently hold more abundant reserves.
