WorldStage– Nigeria’s banking system liquidity remains elevated, hitting ₦8.06 trillion in March 2026, a 89.2% jump from ₦4.26 trillion in February, despite aggressive efforts by the Central Bank of Nigeria (CBN) to control inflation and stabilize the naira by mopping up excess cash.
The banking system liquidity jump is driven by a significant increase in deposits placed by commercial banks at the CBN’s Standing Deposit Facility (SDF).
Specifically, the surge is attributed to liquidity injections totaling ₦926.30 billion from Open Market Operations (OMO) repayments and primary market repayments. Despite the Central Bank’s ₦2.36 trillion OMO mop-up, liquidity remains high, posing risks to interest rate stability and inflation.⁴ ⁵
According to sources in the apex bank, the persistent liquidity glut surged to approximately ₦8.06 trillion by late March 2026.
Analysts warn this could fuel inflation and pressure the foreign exchange market, suggesting further interventions may be needed.
Banks have significantly increased deposits at the CBN’s Standing Deposit Facility (SDF), with daily placements recently peaking above ₦8 trillion—more than double the peaks seen in February 2026.
Large-scale interventions, such as a ₦2.36 trillion Open Market Operation (OMO) mop-up on March 23, caused only temporary tightening before liquidity rebounded due to maturing instruments and fiscal disbursements, sources disclosed.
CBN management efforts at aggressive Mop-ups in January 2026 alone led to the bank draining roughly ₦13.41 trillion from the financial system, nearly five times the amount removed in January 2025.
The apex bank has also scaled up OMO sales, which reached ₦33.12 trillion in 2025 (a 182% increase from 2024), to aggressively sterilize excess cash.
Despite high liquidity, the Monetary Policy Committee (MPC) recently cut the benchmark rate (MPR) by 50 basis points to 26.5% in February 2026, citing 11 consecutive months of declining inflation.
To maintain some control, the CBN has kept the Cash Reserve Ratio (CRR) high at 45% for commercial banks and the Liquidity Ratio at 30%.
Inflows from maturing Treasury bills and OMO instruments continue to reinject cash; for instance, ₦2.31 trillion in maturities was expected in the final week of March 2026 alone.
Government spending such as sustained fiscal disbursements and “Ways and Means” advances have historically contributed to the ongoing surplus.
As the March 31, 2026 re-capitalization deadline draws near, banks have raised over ₦4.05 trillion in fresh capital, further boosting sector cash levels.
