FMDA projects N2.499 trillion money-market inflows as system liquidity falls 23.7%

The Financial Markets Dealers Association (FMDA) predicts that Nigeria's money market will receive around N2.499 trillion in inflows during the week starting October 12, 2026. This projection is based on a decrease in liquidity within the banking system by 23.68%, as detailed in the FMDA's weekly report released on October 12, 2026.

The primary driver of this inflow is the maturation of Open Market Operations (OMO) bills, which are expected to contribute approximately N2.409 trillion, accounting for nearly all of the projected funds. This forecast represents a 13.1% decrease from the N2.877 trillion anticipated in the previous week, and it reflects a sharp reduction in banking system liquidity, which fell to N3.71 trillion from the previous N4.86 trillion.

The increase in Treasury bill yields by 30 basis points to 18.16% and Federal Government bond yields by 25 basis points to 16.06% also influenced this outlook. The actual impact on the banking system and short-term interest rates will largely hinge on how the Central Bank of Nigeria (CBN) manages the expected OMO maturities. Should fresh OMO auctions absorb some of the funds, their effect on liquidity and rates might be mitigated.

Conversely, if most of the inflows remain within the banking system, liquidity conditions could improve, potentially easing short-term yields. Thus, while the projected N2.499 trillion inflow offers liquidity support, the ultimate effect hinges on future monetary operations and market activities.