A sustained liquidity surplus in Nigeria’s banking system has continued to suppress volatility in short-term interest rates, reversing previous trends in the money market. Local deposit money banks have shifted towards depositing excess funds at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF), reducing reliance on the Apex Bank’s Standing Lending Facility (SLF).
This shift reflects a robust liquidity position, supported by inflows from CBN FX swap maturities, FAAC disbursements, and government contract payments. As a result, interbank rates remained relatively steady, with system liquidity staying ample even after a ₦500 billion Open Market Operation (OMO) auction settlement.
Money market rates trended just below the 27% mark, with the Nigerian Interbank Offered Rate (NIBOR) showing mixed movements. While the overnight rate held steady at 0% to 26.75%, the 1-month and 6-month tenors climbed by 0.51% and 0.47% to 27.18% and 28.17%, respectively. Conversely, the 3-month NIBOR eased slightly by 0.01% to 27.68%.
Repo rates also displayed a stable pattern, with the open repo rate unchanged at 26.50% for a fifth consecutive session, and the overnight lending rate inching up 7 basis points to 26.95%.
As of Tuesday, banking system liquidity opened at ₦1.52 trillion, bolstered by ₦1.31 trillion in deposits at the CBN’s SDF window. Analysts expect that the settlement of the ₦397.89 billion FGN bond auction may slightly moderate excess liquidity, but interbank rates are projected to remain within current bounds.
