FMDA projects N3.12trn liquidity boost as OMO maturities dominate market flows
Nigeria’s financial system is expected to receive an estimated N3.12 trillion in liquidity this week, driven largely by N2.97 trillion in Open Market Operations (OMO) maturities, according to the weekly market review published by the Financial Market Dealers Association (FMDA) on Monday, July 13.
The projected inflows represent a 24.8% increase from the N2.50 trillion recorded last week, reflecting the dominant role of OMO repayments in shaping short-term money market conditions.
Activity in the secondary Treasury bills market strengthened sharply last week, with turnover rising 50.32% to N1.09 trillion, compared with N726.87 billion previously. The increase followed heightened investor demand after the Central Bank of Nigeria’s (CBN) auction, where the Debt Management Office (DMO) allotted N1.06 trillion, about 52% above its initial offer of N700 billion. By contrast, FGN bond trading declined 36.91% to N853.26 billion, down from N1.35 trillion the previous week.
The breakdown of expected inflows shows OMO maturities at N2.97 trillion, up from N2.21 trillion last week; FGN bond maturities at N10.56 billion, compared with none last week; corporate bond coupons at N47.27 billion, up from N1.75 billion; and commercial paper maturities at N92.50 billion, compared with just N64.55 million last week. No inflows are expected from FGN bond coupons, corporate bond maturities or FAAC allocations.
Last week, system liquidity improved 50.81% to N4.33 trillion, from N2.87 trillion, after repayments from maturing securities exceeded the CBN’s sterilisation activities. Net liquidity injection was estimated at N1.44 trillion, following N2.50 trillion in repayments and N1.06 trillion allotted at the Treasury bill auction.
Analysts expect the liquidity surge to keep short-term funding conditions comfortable, but note that the CBN may deploy fresh OMO auctions to absorb part of the excess liquidity and stabilise interest rates. With no scheduled Treasury bill or FGN bond auctions this week, OMO operations are likely to remain the apex bank’s primary tool for managing liquidity.
This straight story captures the OMO maturities, the Treasury bill turnover, and the system liquidity outlook that will shape Nigeria’s money market in the coming days.
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