The Central Bank of Nigeria (CBN) has moderated its liquidity mop-up operations, paving the way for an estimated ₦13.79 trillion in fresh inflows into the financial system in November.
The projected inflows, driven largely by maturing Open Market Operations (OMO) instruments and government disbursements, represent a 2.16 per cent increase over the ₦13.495 trillion recorded in October.
The Financial Markets Dealers Association (FMDA), in its October 2026 market report, attributed the improved liquidity outlook partly to the apex bank’s reduced pace of liquidity absorption, which coincided with a 56.75 per cent increase in banking system liquidity to ₦7.373 trillion in October, from ₦4.703 trillion in September.
The CBN allotted ₦6.182 trillion in fresh OMO securities in October against ₦9.051 trillion in maturing obligations, resulting in a repayment surplus of approximately ₦2.87 trillion before other liquidity movements.
This marked a significant shift from September, when the apex bank sold about ₦17.51 trillion in OMO securities against maturities of ₦10.89 trillion, effectively withdrawing approximately ₦6.62 trillion from the financial system.
The moderation became more evident towards the end of October, as the CBN reduced allotments at its final OMO auction. Treasury Bills auctions also recorded substantial unfilled subscriptions, indicating a more selective approach to liquidity management.
Breaking down the November projection, the FMDA expects OMO maturities to account for the largest share at ₦8.927 trillion, representing 64.75 per cent of anticipated inflows.
Federation Account Allocation Committee (FAAC) distributions are projected at ₦2.5 trillion, while Treasury Bills maturities are estimated at ₦1.919 trillion.
Other expected inflows include ₦323.154 billion from Federal Government bond coupon payments, ₦68.032 billion from corporate bond coupons and ₦50.016 billion from commercial paper maturities.
Combined, OMO maturities, FAAC allocations and Treasury Bills repayments will account for approximately 96.8 per cent of the projected November inflows.
Treasury Bills maturities are expected to record the largest monthly increase, rising by 46.49 per cent from ₦1.310 trillion in October. In contrast, OMO maturities are projected to decline by 1.37 per cent.
The report also identified a $105.94 million Eurobond coupon payment due in November, although the amount is excluded from the naira liquidity projection.
For banks and fixed-income investors, the anticipated inflows could sustain demand for short-term securities if fresh OMO and Treasury Bills issuances remain below maturing obligations.
However, the impact on investment yields will depend on the volume of new securities issued and the rates investors are willing to accept.
Despite the substantial increase in banking system liquidity, interbank funding rates remained relatively stable in October. The Nigeria Overnight Financing Rate closed unchanged at 20 per cent, while the overnight rate declined by five basis points to 20.38 per cent.
The Monetary Policy Rate also remained at 23 per cent following the CBN’s September decision to cut it by 350 basis points.
The FMDA expects relatively comfortable liquidity conditions if the apex bank maintains the selective auction allotments recorded towards the end of October.
However, it cautioned banks against weakening their liquidity buffers, given the CBN’s continued reliance on OMO auctions to manage excess funds.
The association noted that the projected ₦13.79 trillion does not automatically translate into an equivalent increase in available banking system liquidity, as the eventual impact will depend on fresh securities issuance, government cash movements and the extent to which maturing obligations are reinvested.
A return to aggressive OMO issuance could absorb a significant portion of the expected inflows, while continued selective allotments could sustain excess liquidity and exert further downward pressure on short-term yields.
