FMDA projects N8.84trn liquidity inflows in April on OMO, T-Bills maturities

Nigeria’s financial system is projected to receive an estimated N8.84 trillion in liquidity inflows in April 2026, driven largely by maturing Open Market Operations (OMO) and Treasury Bills.

This projection is based on data compiled by the Financial Market Dealers Association (FMDA), an umbrella body of traders from banks and discount houses.

The anticipated inflow represents a 15.5% decline from the N10.46 trillion recorded in March, when liquidity surged to its highest level so far this year.

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The expected moderation reflects a sharp drop in Treasury bill maturities, even as other inflow drivers remain significant. Nonetheless, system liquidity is still expected to remain elevated, raising questions about how monetary authorities will respond to manage excess funds in the banking system.

What the data is saying

FMDA data shows that multiple inflow sources will support liquidity levels in April, with OMO maturities leading the pack. These inflows are expected to sustain elevated liquidity conditions despite the month-on-month decline.

• OMO maturities will account for the largest share at N5.88 trillion, representing about 66% of total inflows.
• Federation Account Allocation Committee (FAAC) disbursements are estimated at N1.8 trillion, providing additional liquidity support.
• Treasury bill maturities are projected to drop significantly to N722.72 billion from N2.84 trillion recorded in March.

The dominance of OMO maturities highlights their central role in shaping liquidity trends and suggests a likely policy response from the Central Bank of Nigeria (CBN) to manage the excess funds.

More insights

Analysts expect that the CBN may step up liquidity management efforts to counterbalance the impact of these large inflows. This is aimed at preventing excessive easing in financial conditions that could fuel macroeconomic instability.

• The apex bank may introduce fresh OMO issuances to absorb excess liquidity from the system.
• Additional liquidity-mopping tools could be deployed to stabilise short-term interest rates.
• These measures are also expected to help curb inflationary pressures associated with surplus liquidity.

The effectiveness of these interventions will determine how well the CBN balances the need for adequate liquidity with the imperative of maintaining price stability in April.

**What you should know **

Nigeria’s financial system has experienced a sustained surge in liquidity in recent months, largely driven by maturing instruments returning funds into the banking system.

• March data showed liquidity peaking, with banks significantly increasing placements at the CBN’s Standing Deposit Facility (SDF).
• The surge in March was primarily driven by repayments from OMO and Treasury bills, which unlocked previously held funds.
• This created a compounding effect on excess reserves within the banking system, pushing liquidity to elevated levels.
• The projected N8.84 trillion inflow for April indicates liquidity will remain high, albeit at a slower pace, due to reduced Treasury bill maturities.
• Excess liquidity is expected to continue exerting downward pressure on interbank rates, similar to trends observed in March.

However, the persistence of surplus liquidity is likely to trigger more aggressive sterilisation measures by the CBN, as policymakers attempt to balance credit expansion with inflation control.

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