The Central Bank of Nigeria (CBN) says liquidity in the banking system fell by N930 billion to N3.66 trillion, down from N6.81 trillion recorded on August 11.
The latest money-market data published by the apex bank on its website on Friday attributed the liquidity decline to the settlement of its Treasury Bills auction.
It also noted that the overnight lending rate rose by two basis points to 22.20 per cent, up from 22.18 per cent as at August 11.
According to the bank, the open buy back (OBB) rate remained unchanged at 22.00 per cent.
The latest liquidity position represents a decline from the higher surplus recorded in August, when system liquidity opened at N6.81 trillion on August 11, following a N2.48 trillion inflow from matured open market operations (OMO) securities.
The CBN has continued to use OMO and treasury bills operations to manage liquidity in the financial system.
At its August 26 OMO auction, the CBN received N4.26 trillion in subscriptions against N1 trillion offered and allotted N2.80 trillion.
The apex bank also recorded strong demand at its treasury bills auction on the same day, receiving N3.79 trillion in subscriptions against N700 billion offered and allotting N762.89 billion.
In August, the CBN revised its framework for OMO participation and discount window access, opening participation in both the primary and secondary OMO markets to all eligible investors through deposit money banks (DMBs).
Under the revised framework, individuals, corporates and non-bank financial institutions became eligible to participate in OMO transactions through their banks.
The apex bank also lifted the suspension on tenored repo operations, allowing repurchase transactions with maturities ranging from four to 90 days, as part of measures to improve money-market functioning and liquidity management.
Despite the latest decline, the financial system remains in surplus, with liquidity standing at N3.66 trillion at the opening of Friday’s market.
(NAN)
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