Nigeria’s interbank lending rates have adjusted downward as liquidity conditions in the financial system improve, following a rebound triggered by the settlement of Open Market Operation (OMO) bills and renewed activity in Treasury bill auctions.
The banking sector’s short-term funding pressure, which intensified after the N2.12 trillion OMO bill settlement earlier this week, eased after the system opened with a liquidity surplus of ₦229.4 billion, despite the ₦173.25 billion Treasury bill settlement at midweek.
Although there were no major external inflows, the uptick in deposit money banks’ transactions helped restore liquidity across the market.
Data from the FMDQ Securities Exchange shows that short-term benchmark interest rates have remained broadly stable, reflecting the absence of acute liquidity strain in the money market. Analysts say interbank lending rates are likely to maintain this trajectory unless disrupted by significant funding calls.
The Nigerian Interbank Offered Rate (NIBOR) declined across key tenors, mirroring the liquidity boost. According to a market report by Cowry Asset Management Limited, overnight rates fell by 13 basis points, the one-month tenor dropped by 42 basis points, the three-month tenor declined by 53 basis points, and the six-month tenor eased by 57 basis points.
In the money market, the Open Repo Rate (OPR) was unchanged at 26.60%, while the overnight lending rate edged slightly higher by 2 basis points to 27.02%.
Meanwhile, the Nigerian Interbank Treasury Bills True Yield Curve recorded yield increases across all maturities, driven by a broad bearish sentiment among investors. Consequently, the average yield on Treasury bills climbed by 7 basis points to 17.85%, as sell-offs dominated secondary market activity.
