The Central Bank of Nigeria has withdrawn N4.48 trillion from the financial system within six days, executing one of its most aggressive liquidity tightening moves in recent months.
The funds were mopped up through two major Open Market Operations (OMO) auctions conducted on April 9 and April 14, as the apex bank intensified efforts to curb excess liquidity and stabilise the economy.
Financial system data shows the scale of intervention:
- N2.31 trillion absorbed on April 9
- N2.17 trillion absorbed on April 14
This pushed banks’ opening balances down sharply to N99.05 billion on April 15, from N135.76 billion a day earlier, reversing earlier gains recorded in the period.
Despite the tightening, liquidity levels remain elevated, with banks still parking large sums in the Standing Deposit Facility (SDF).
SDF balances declined to N3.69 trillion on April 15 from N6.98 trillion on April 8, suggesting that while the CBN has successfully absorbed part of the surplus cash, significant liquidity still exists in the system.
The data also shows:
- N1.34 trillion in OMO repayments on April 14
- N731.38 billion in primary market sales on April 9
- N357.89 billion repaid the same day
The pattern reflects a carefully calibrated strategy to manage liquidity without destabilising the money market.
The latest intervention aligns with the CBN’s broader monetary policy objective of tightening financial conditions to curb inflation and support exchange rate stability.
By reducing excess cash in circulation, the apex bank aims to limit speculative pressure and moderate demand-driven price increases.
While the banking system remains liquid, the tightening signals a shift toward more controlled financial conditions.
Banks appear cautious, preferring to deposit funds with the CBN rather than expand lending aggressively—an indication of risk aversion amid uncertain macroeconomic conditions.
The sustained liquidity mop-up could influence interbank rates, credit growth, and overall market dynamics in the coming weeks.
The move mirrors a similar operation in late March, when the CBN absorbed N4.11 trillion in dual OMO sessions.
Together, these actions point to a consistent policy stance: aggressively manage excess liquidity while maintaining overall market stability.
