LAGOS — Excess liquidity in the banking system rose to about N1.24
trillion, last weekend, following huge backlog of unmet foreign exchange demand
for which the Central aBank of Nigeria, CBN, returned the Naira back-up funds
to the banks on Friday.
There is also indication that the liquidity overflow will reach an all
time high of N1.5 trillion by end of this week, following the maturity of
Treasury Bills worth N257.9 billion which will be credited to the banks by CBN.
This is expected to see interbank money rates trending at very low
levels with further erosion of margins and yields in money market instruments.
However, financial analysts expect CBN to mop up the unprecedented
liquidity overflow with re-issue of Treasury Bills at a predetermined volume to
match the desired liquidity level.
