Nigeria’s financial system witnessed a significant expansion in liquidity in May, with average system liquidity rising to N5.22 trillion despite aggressive cash sterilisation by the Central Bank of Nigeria (CBN), according to the latest Monthly Market Report released by the Financial Markets Dealers Association (FMDA).
The report showed that average liquidity in the banking system increased by 7.76 percent month-on-month, underscoring the strength of market liquidity conditions even as the CBN withdrew an estimated N12.06 trillion through various liquidity management operations during the month.
Market participants are now looking ahead to an even larger liquidity injection in June, with FMDA projecting total inflows of N10.90 trillion into the financial system, about 3.5 percent higher than the N10.53 trillion recorded in May.
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“Looking ahead, an estimated N10.90 trillion in inflows is projected for June,” FMDA said, noting that OMO maturities would remain the dominant source of liquidity in the market.
