Excess liquidity in banking system peaks at N6.94trn

Spread the word Banking system liquidity peaked weekend at a high of N8.4 trillion, largely because the apex bank was slack in mopping up excess funds in the open market., according to marketq data.

At ythe same time, interbank benchmark rates moved in mixed directions despite a massive liquidity surge in the Nigerian financial system, as deposit money banks (DMBs) continued to park substantial excess funds with the Central Bank of Nigeria (CBN).Nigeria economic insights

The banking system’s liquidity expanded significantly week-on-week, reflecting the absence of funding pressures and inflows from expired instruments.

Financial analysts at Cowry Asset Management Limited reported that net liquidity surplus rose to N6.94 trillion by Friday’s close, up from N6.28 trillion the previous week.

Excess credit within the banking system surged by about N2.1 trillion, supported by substantial maturities and repayments of short-term instruments.

The market recorded about N2.1 trillion in inflows from matured OMO bills, N392.8 billion from expired Treasury bills, and N330.0 billion in primary market repayments.Market value reports

Despite multiple liquidity inflows throughout the week, the CBN conducted a single Open Market Operation (OMO) auction on Thursday, with mop-up operations raising N2.6 trillion to refinance maturing OMO obligations to investors.

Banks Park N7.9 Trillion at CBN’s Standing Deposit Facility

Consequent to the persistent liquidity overhang, commercial bank balances at the Central Bank of Nigeria’s Standing Deposit Facility (SDF) surged to N7.9 trillion.