CBN Liquidity Operations Shape Orderly Market Conditions,  N2.04tn Inflows Expected

Nume Ekeghe 

Data from the Financial Markets Dealers Association (FMDA) has showed that average system liquidity declined by 17.68 per cent to N4.40 trillion last week, as the Central Bank of Nigeria (CBN) mopped up about N4.55 trillion through liquidity management operations.

According to FMDA data, Open Market Operations (OMO) continued to account for the bulk of liquidity movements in the financial system, with OMO maturities recorded at N2.25 trillion, while N1.97 trillion is expected this week.

Looking ahead, FMDA data indicated that about N2.04 trillion is expected to flow into the system this week from maturing securities, largely driven by OMO maturities, which account for about 97 per cent of total projected inflows.

FGN bond coupon payments stood at N47.84 billion, down from N161.28 billion previously, while commercial paper maturities were recorded at N23.10 billion. There were no FGN bond maturities or FAAC inflows during the period under review.

FMDA data also showed that total estimated inflows declined to N2.04 trillion from N3.03 trillion in the previous week.

In the foreign exchange market, the naira depreciated slightly at the official window, while overall turnover in the Nigerian Foreign Exchange Market (NFEM) declined by more than 40 per cent. External reserves recorded a marginal increase during the week.

Oil prices declined by 2.44 per cent on average to $101.76 per barrel, amid easing supply concerns and cautious sentiment in global markets. In the equities market, both the All-Share Index (ASI) and market capitalisation recorded slight declines. Fixed income yields remained broadly stable during the week, despite mixed movements across bond and Treasury bill maturities.