CBN faces N8.57 trillion liquidity surge as OMO, Bond maturities hit banking system

The Central Bank of Nigeria (CBN) is bracing for a potential liquidity surge of up to N8.57 trillion this week, starting from Monday, September 28. This surge is anticipated due to the possible injection of N2.59 trillion from maturing Open Market Operations (OMO) bills and bond coupons. According to Nairametrics' analysis of the Central Bank's financial data, net system liquidity had already risen to N5.98 trillion in the week leading up to September 25, up from N2.86 trillion in the previous week.

The projected increase is fueled by N2.43 trillion in OMO maturities and N164 billion in bond coupons, potentially leading to another liquidity mop-up operation by the CBN. Banks have parked more than N7 trillion in the Standing Deposit Facility (SDF) over the past week, indicating a significant surplus liquidity within the financial system.

This liquidity build-up follows a trend observed throughout 2026, where banks have frequently deposited large amounts of cash with the CBN through the SDF, even after substantial liquidity withdrawals. Additionally, the secondary Treasury bills market has turned bullish following the Monetary Policy Committee's (MPC) easing action, with the highest repricing observed at the longer end of the curve.

The oversubscription, despite falling yields, aligns with the broader Q3 2026 NTB Issuance Programme, in which the CBN allocated N8.14 trillion across the quarter's auctions, exceeding the originally targeted N5.8 trillion by 40.34%. The MPC's decision to cut the Monetary Policy Rate by 350 basis points to 23% during its September 22 meeting represents the most substantial single-meeting reduction within the current easing cycle.

Consequently, the upcoming sessions will offer an early opportunity to assess the extent to which the CBN utilizes sterilisation to control liquidity and the dissemination of its newly calibrated, more accommodating monetary policy stance.