Nigeria's Banking Sector to See N15.72tn Liquidity Inflow

The Financial Markets Dealers Association (FMDA) projects that Nigeria's banking system will experience a liquidity inflow of N15.72 trillion in September 2023, primarily driven by maturing OMO bills and other securities. This figure marks a 16.1% increase from the estimated N13.54 trillion inflow in August.

OMO maturities are expected to contribute approximately N11.60 trillion, accounting for about 74% of the total inflows. Additionally, Treasury bills maturities are projected to add N1.255 trillion, while FGN bond coupons will contribute N285.6 billion.

FAAC allocations are estimated at N2.5 trillion, with the remainder coming from corporate bonds and commercial paper maturities and coupons. Despite the substantial inflow, the FMDA cautions that the N15.72 trillion may not remain in the system, as the Central Bank of Nigeria's sterilisation stance will influence net liquidity.

In August, system liquidity rose from N2.98 trillion to N4.65 trillion, but money-market conditions did not loosen uniformly, with treasury bill yields increasing.