CBN absorbs N2.6trn liquidity glut to prevent sharp drop in market rates

The Central Bank of Nigeria (CBN) absorbed about N2.6 trillion in excess liquidity through the Standing Deposit Facility (SDF) as banking system liquidity expanded sharply during the week, limiting the potential decline in money market rates last week.
System liquidity rose by 36.0 per cent week-on-week (w/w) to N4.08 trillion, compared with N3.00 trillion in the previous week. According to data, the increase was driven mainly by N2.45 trillion in primary market repayments, which injected fresh funds into the banking system.
Banks also placed about N2.60 trillion with the CBN’s SDF, reflecting the significant volume of surplus cash available in the market.
The inflows lifted the o...