CBN Records 150% Spike in Bank Deposits Following OMO Cash Inflows
A sharp influx of funds from Central Bank of Nigeria (CBN)’s Open Market Operation (OMO) repayments has triggered a dramatic surge in commercial banks’ deposits with the apex bank rising by 149.7 percent in just one day.
According to CBN data, deposits jumped from ₦1.06 trillion on Tuesday to ₦2.64 trillion on Wednesday following massive OMO maturities paid out earlier in the week.
The spike underscores the extent of excess liquidity now flooding the banking system.
The recent influx stems from the maturity of government securities sold under OMO a key tool used by the CBN to regulate money supply, stabilize interest rates, and manage inflation.
The repayments infused fresh cash into banks, prompting many to park surplus funds back with the central bank rather than re-deploy them into credit or market activity.
In response, short-term borrowing and inter-bank rates have softened. The interbank Overnight Rate (ON) and related yields dipped as surplus cash eased funding stress across the money market.
Analysts suggest that this development reflects a broader trend of liquidity hoarding by banks. Rather than channeling cash into commercial lending, banks appear to be adopting a cautious, risk-averse stance choosing the security of deposits at the CBN over the uncertainties of the real economy.
The surge in cash deposits, therefore, offers a snapshot of the current state of Nigeria’s banking sector: flush with liquidity but constrained in its willingness to expand credit, even as monetary-policy tools continue reshaping money-market dynamics.
Comments