Market News

From Adanna Nnamani, Abuja

The Central Bank of Nigeria (CBN) has sterilised N4.11 trillion from the financial system within one week through dual Open Market Operations (OMO) conducted on March 23 and 27, 2026, in a renewed push to rein in excess liquidity and curb inflationary pressures.

Financial data released by the apex bank at the on Friday showed the scale of the liquidity mop-up, even as inflows into the system remained strong, with opening balances of banks and discount houses hitting a record N716.033 billion.

Breakdown of the intervention indicated that the CBN drained N2.357 trillion on March 23 and N1.753 trillion on March 27 through OMO auctions. However, the impact was partly offset by inflows estimated at N2.985 trillion, leaving a net withdrawal of N1.125 trillion from the financial system.

The aggressive liquidity management underscores the CBN’s sustained tightening stance aimed at stabilising prices and controlling excess cash in the banking system.

But analysts warn that the scale and frequency of such interventions may pose risks to Nigeria’s long-term economic growth.

Further data showed that deposit money banks continued to channel large volumes of funds into the CBN’s Standing Deposit Facility (SDF), taking advantage of attractive interest rates above 22 per cent.

Banks reportedly deposited N8.176 trillion and N6.592 trillion on Monday and Tuesday respectively, while placements rose to N7.968 trillion on Wednesday, N8.551 trillion on

Thursday, and N6.800 trillion on Friday.

The high yields on the SDF have incentivised banks to park excess liquidity with the apex bank rather than extend credit to the real sector, raising concerns about weak transmission of monetary policy to productive activities.

In the first quarter of 2026, the CBN intensified its liquidity control measures, deploying a mix of OMO auctions, Treasury bill issuances and the SDF to absorb surplus funds. In January alone, over N13.41 trillion was withdrawn from the system, highlighting the aggressive nature of the tightening cycle.

Despite these measures, liquidity conditions have remained elevated, with banking system balances exceeding N8 trillion by March, reflecting persistent inflows from maturing securities and investor positioning.

Analysts noted that the recurring cycle of large-scale mop-ups has yet to fully drain excess liquidity, as structural inflows continue to offset the CBN’s tightening efforts. They stressed that beyond managing liquidity levels, there is a need to ensure that available funds are channelled into productive sectors capable of driving real economic growth.