Nigeria’s financial system reflects firm control as the CBN actively manages liquidity to tame inflation pressures.
Early in 2026, policymakers intensified efforts and actively stabilised prices while navigating fragile economic conditions across markets.
CBN Aggressive Liquidity Mop-Up
In March 2026, the CBN withdrew ₦4.11 trillion through two OMO auctions within one week, showing strong intervention.
On March 23, it mopped up ₦2.357 trillion, then removed another ₦1.753 trillion on March 27.
Despite these actions, banks held strong liquidity and recorded ₦716.033 billion in combined opening balances.
Meanwhile, cash continued flowing through the system, and this kept liquidity elevated despite repeated withdrawals.
Additionally, the CBN injected ₦2.985 trillion, and this left a net withdrawal of ₦1.125 trillion.
Consequently, this balance reflected a deliberate strategy to control inflation while preserving financial stability.
Read Also: CBN Lowers NTB Yields As Liquidity Surges At March 25 Auction
Banking Behaviour Shifts
Banks reacted by parking funds at the Standing Deposit Facility instead of increasing lending activity.
Because rates exceeded 22%, deposits surged to ₦7.968 trillion, ₦8.551 trillion, and ₦6.800 trillion.
Earlier in the week, banks also deposited ₦8.176 trillion and ₦6.592 trillion into the SDF.
Across Q1 2026, the CBN deployed OMO, Treasury bills, and SDF tools to absorb excess liquidity.
In January alone, the CBN withdrew more than ₦13.41 trillion through aggressive tightening measures.
However, liquidity remained above ₦8 trillion because inflows and maturing instruments kept replenishing funds.
As a result, funds kept returning, and the CBN sustained continuous intervention to stabilise markets.
Growth Versus Inflation Debate
Analysts argue that the key issue lies in directing liquidity into productive sectors of the economy.
Mr Olubunmi Ayokunle stated that growth requires some inflation and increased money supply.
He explained that high interest rates raise borrowing costs for businesses and households.
Similarly, Mr Blakey Ijezie warned that excessive liquidity sterilisation could restrict growth and slow expansion.
He questioned how the economy can grow when the CBN continuously drains liquidity from circulation.
Therefore, both experts stress investing in manufacturing, agriculture, and infrastructure to drive sustainable growth.
Nigeria targets a ₦1 trillion economy by 2030 under its current economic roadmap.
Ultimately, achieving this goal requires balancing inflation control with policies that actively support growth.
