According to Broadstreet statistics, Nigerian deposit money banks (DMBs) borrowed almost ₦1.8 trillion from the CBN’s Standing Lending Facility (SLF) to resolve liquidity gaps. The majority of these borrowings came from smaller banks, as cash-rich lenders held onto surplus liquidity and demanded higher interest rates for its release.
Afrinvest Limited saw a liquidity outflow of about ₦180 billion from the Standing Deposit Facility, offset by borrowings from the SLF. Despite intermittent inflows into the financial system, liquidity conditions remained tight for the majority of the week, with little alleviation until considerable inflows were observed later.
Inflows of ₦143 billion from Remita payments and FGN bond coupon distributions eased the liquidity bottleneck in the financial system. The system deficit decreased to ₦57.7 billion, a significant improvement over the previous week’s shortfall of ₦361.1 billion.
TrustBanc Capital Limited said that DMBs borrowed ₦1.78 trillion through the CBN’s SLF, alleviating liquidity strains in the banking sector. However, interbank rates remained elevated owing to liquidity-reducing actions such as foreign exchange sales to authorized dealer banks and cash reserve ratio (CRR) debits.
Funding pressures were generally lighter ahead of scheduled bond and Treasury bill auctions for the new week. Some banks adjusted their investments in debt securities in response to their liquidity positions.
Liquidity levels began the week with a deficit of about ₦60 billion and remained negative for most of the period. By the end of the week, however, the system recorded a positive balance of ₦396.75 billion, primarily driven by substantial Remita inflows and FGN bond coupon payments.
During the week, additional liquidity drains occurred due to the CBN’s foreign exchange interventions and CRR-related activities. Despite these, interbank rates fell sharply as funding demand eased.
The overnight policy rate dropped by 5.86 percentage points to 26.09%, while the overnight lending rate decreased by 5.60 percentage points to 26.88%, reflecting improved market conditions compared to the previous week.
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