CBN mops up ₦724B as banking liquidity hits ₦8.3T — what this means for your returns
Banking system liquidity surged to ₦8.311 trillion at the Standing Deposit Facility (SDF) on Friday, November 6, even as the CBN mopped up ₦724.32 billion through its Open Market Operations auction. SDF balances have climbed steadily — up ₦347 billion (4.36%) from Thursday and ₦1.35 trillion (19.3%) from Wednesday — while banks' opening balances crashed 68% over the same period, from ₦612 billion to ₦194 billion, signaling cash is moving into the CBN's overnight window rather than staying in operating accounts.
The OMO auction saw strong demand: ₦1.887 trillion in bids for a ₦1 trillion offer (1.89x cover), but the CBN allotted only ₦724.32 billion (72% of offer), leaving ₦1.16 trillion unallocated. Stop rates were 17.25% (179-day, maturing May 2027) and 16.54% (270-day, maturing August 2027), with true yields nearly identical at ~18.84%. This allotment is roughly a quarter of the ₦2.95 trillion the CBN took in on November 3.
Why it matters: The CBN is selectively mopping up liquidity while keeping rates attractive for investors. FMDA projects ₦13.79 trillion in November inflows from OMO maturities, FAAC allocations, and T-bill repayments. System liquidity already jumped 56.75% in October to ₦7.37 trillion. Another MPC meeting looms this month.
With T-bill yields near 19% and the CBN signaling it won't absorb all excess cash, fixed-income investors face a choice: lock in current rates on longer tenors, or stay short expecting yields to climb if the CBN steps up mop-ups at the next auction.