The Central Bank of Nigeria has disclosed a substantial decrease in overall liquidity within the country’s banking sector, with total liquidity falling below N100 billion in November 2023.
The revelation came during an address by CBN Governor Olayemi Cardoso at the 58th Bankers Dinner hosted by the Chartered Institute of Bankers of Nigeria in Lagos last Friday.
Governor Cardoso underscored the pivotal role of sustained debits in Cash Reserves Requirement, which effectively moderated liquidity levels throughout September and October 2023.
Proactive measures implemented by the central bank have successfully curbed excess liquidity in the banking system, resulting in a significant upswing in the Overnight Bank Borrowing rate.
These measures align with the objectives outlined in the monetary policy program.
In addition to these efforts, Governor Cardoso revealed that the central bank has taken further steps to enhance liquidity management.
This includes the establishment of a new liquidity management committee within the institution, convening daily at 8 a.m.
The primary focus of this committee is to assess liquidity conditions rigorously, ensuring they are consistently maintained at optimal levels.
Governor Cardoso highlighted the tangible outcomes of these measures, citing a noteworthy reduction in excess liquidity across the banking system and a concurrent increase in the Overnight Bank Borrowing rate—a clear indication of the alignment with the monetary policy program.
