Liquidity in Nigeria’s banking system fell by ₦930 billion to ₦3.66 trillion following the settlement of the Central Bank of Nigeria’s Treasury Bills auction.
The latest money-market data showed that the financial system remained in surplus despite the decline recorded at the opening of Friday’s trading session.
The overnight lending rate rose by two basis points to 22.20 per cent from 22.18 per cent, while the Open Buy Back rate remained unchanged at 22 per cent.
The latest liquidity position was also ₦3.15 trillion below the ₦6.81 trillion surplus recorded on August 11, following a ₦2.48 trillion inflow from matured Open Market Operations securities.
The CBN has continued to deploy OMO and Treasury Bills auctions to regulate the volume of money circulating within the financial system.
At its August 26 OMO auction, the apex bank received subscriptions totalling ₦4.26 trillion against the ₦1 trillion offered. It eventually allotted ₦2.80 trillion.
Strong investor demand was also recorded at the Treasury Bills auction conducted on the same day, with subscriptions reaching ₦3.79 trillion against the ₦700 billion offered. The CBN allotted ₦762.89 billion.
The apex bank had earlier revised its framework governing participation in OMO transactions and access to the discount window, opening both the primary and secondary OMO markets to eligible investors through deposit money banks.
Under the revised framework, individuals, corporate organisations and non-bank financial institutions are permitted to participate in OMO transactions through their banks.
The CBN also lifted the suspension on tenored repurchase operations, allowing transactions with maturities ranging from four to 90 days as part of measures to improve money-market operations and liquidity management.