CBN Liquidity Operations Expected to Generate N2.04 trillion Inflows, Maintaining Orderly Market Conditions

Nume Ekeghe

Data from the Financial Markets Dealers Association (FMDA) show that average system liquidity fell 17.68 percent to N4.40 trillion last week, as the Central Bank of Nigeria (CBN) withdrew about N4.55 trillion through liquidity management operations.

According to FMDA figures, Open Market Operations (OMO) continued to dominate liquidity movements in the financial system, with OMO maturities amounting to N2.25 trillion, and an additional N1.97 trillion is expected to mature this week.

Looking ahead, FMDA data indicate that roughly N2.04 trillion is expected to flow into the system this week from maturing securities, largely driven by OMO maturities, which account for about 97 percent of the projected inflows.

FGN bond coupon payments were N47.84 billion, down from N161.28 billion previously, while commercial paper maturities were N23.10 billion. There were no FGN bond maturities or FAAC inflows during the period under review.

FMDA data also show that total estimated inflows declined to N2.04 trillion from N3.03 trillion in the previous week.

In the foreign exchange market, the naira depreciated slightly at the official window, while overall turnover in the Nigerian Foreign Exchange Market (NFEM) fell by more than 40 percent. External reserves recorded a marginal increase during the week.

Oil prices slipped 2.44 percent on average to $101.76 per barrel, as supply concerns eased and global market sentiment remained cautious. In the equities market, both the All-Share Index (ASI) and market capitalisation recorded modest declines. Fixed‑income yields stayed broadly stable during the week, despite mixed movements across bond and Treasury bill maturities.