A wave of maturing OMO bills and government disbursements will keep cash levels high, raising fresh questions about how the Central Bank will rein in excess liquidity……
Nigeria’s financial system is bracing for another significant influx of funds in April 2026, with total liquidity inflows projected at ₦8.84 trillion, according to data compiled by the Financial Market Dealers Association (FMDA).
While the figure marks a 15.5% drop from March’s ₦10.46 trillion, it still signals a sustained period of elevated liquidity one that could shape interest rates, inflation trends, and monetary policy decisions in the weeks ahead.
At the heart of the expected inflow is a surge in maturing Open Market Operations (OMO), which alone will inject ₦5.88 trillion into the system. This accounts for roughly two-thirds of total projected inflows, reinforcing the dominant role OMO instruments continue to play in Nigeria’s liquidity cycle.
Additional support will come from ₦1.8 trillion in Federation Account Allocation Committee (FAAC) disbursements, ensuring that liquidity remains robust across the economy as funds flow to various tiers of government.
However, a sharp slowdown in Treasury bill maturities is expected to temper the overall inflow. April projections place T-bill maturities at ₦722.72 billion, a steep decline from the ₦2.84 trillion recorded in March, and the primary reason for the month-on-month moderation.
Liquidity Still High But Not Without Risks
Despite the decline, analysts believe the financial system will continue to experience above-normal liquidity conditions, extending trends observed in recent months.
March saw liquidity hit its highest level so far this year, driven by large repayments from OMO and Treasury bills. That surge prompted banks to significantly increase placements in the Standing Deposit Facility (SDF), reflecting the scale of excess cash in the system.
With April’s inflows still substantial, similar conditions are expected to persist—potentially putting downward pressure on interbank rates and easing short-term borrowing costs.
But there’s a catch.
Excess liquidity, if left unchecked, can fuel inflation and destabilise macroeconomic conditions. That concern is likely to prompt a response from the Central Bank of Nigeria, which has consistently moved to absorb surplus funds during periods of strong inflows.
CBN Likely to Step Up Intervention
Market watchers anticipate a more active stance from the apex bank in April, as policymakers attempt to strike a balance between supporting liquidity and maintaining price stability.
Possible measures include:
- Fresh OMO issuances to absorb excess cash
- Increased use of liquidity management tools
- Efforts to stabilise short-term interest rates
Such interventions are critical in preventing an overly loose financial environment that could accelerate inflationary pressures.
A Delicate Balancing Act
Nigeria’s recent liquidity trend underscores a recurring challenge for monetary authorities: how to manage large inflows without stifling economic activity.
While high liquidity can support lending and economic expansion, it also carries the risk of overheating the system if not carefully controlled.
For April, the outlook suggests a continuation of this delicate balancing act. Liquidity may be easing from March’s peak, but it remains sufficiently elevated to keep policymakers on alert and markets watching closely.
