Liquidity Mop-Up Shrinks Banking System Cash by 18.4% Despite Expected ₦2.56tn Inflows

Banking system liquidity fell 18.4 per cent week-on-week to ₦3.78 trillion, down from ₦4.63 trillion, after a combination of Central Bank of Nigeria cash reserve ratio debits, a private open market operations auction and a Debt Management Office bond sale that allocated ₦929.32 billion drained cash from the system.

Dealers expect roughly ₦2.56 trillion in fresh inflows over the week, well below the ₦5.40 trillion recorded previously, with OMO maturities accounting for about 85 per cent of the projected total. The apex bank has also scheduled a ₦700 billion Treasury bill auction spanning 91-day, 182-day and 364-day tenors.

Sentiment across the fixed income market nonetheless stayed firm. Average sovereign bond yields eased 37 basis points to 17.16 per cent, while the bond auction drew ₦1.74 trillion in subscriptions against ₦1.20 trillion on offer, signalling sustained investor appetite despite the tighter liquidity position.

Source: ThisDay