Liquidity levels in Nigeria’s money market tightened significantly following the settlement of the Central Bank of Nigeria’s (CBN) Open Market Operations (OMO) bills auction, leading to a shift in short-term interest rates.
Analysts noted that the settlement, amounting to ₦2.12 trillion, was concluded after the CBN’s primary market operation on Friday, a move expected to push market rates higher this week.
According to a market report from Meristem Securities Limited, system liquidity settled at around ₦1 trillion, up from a deficit of ₦0.32 trillion recorded previously, as market conditions normalised after the OMO issuance.
The Nigerian Interbank Offered Rate (NIBOR) opened the new trading week on a positive tone, with declines across all tenors indicating continued strength in liquidity across the banking system.
However, placements at the CBN’s Standing Deposit Facility (SDF) declined further, reflecting the apex bank’s intensified liquidity mop-up strategy in recent weeks.
Data showed that total placements at the SDF averaged ₦1.54 trillion, representing a 171% decline from ₦4.18 trillion the prior week. Despite this contraction, system liquidity remained in surplus, though it dropped 47% to ₦1.80 trillion by Friday’s close.
Money market funding rates displayed mixed trends on Monday, as the Overnight Rate (ON) held steady at 24.50%, while the Open Repo (OPR) rate increased marginally by 2 basis points to 24.86%.
In the Treasury Bills (T-Bills) secondary market, yields moved unevenly across maturities. The 3-month and 12-month Nigerian Treasury Bill (NTB) yields climbed by 9 bps and 5 bps, respectively, while the 1-month tenor remained unchanged, and the 6-month yield dropped 8 bps, according to Cowry Asset Management Limited.
Despite the mixed yield performance, the firm noted that the average NTB yield fell slightly by 3 bps to 17.35%, reflecting continued bullish investor sentiment and sustained demand within the secondary market.
 Open...){kind=link}