Nigeria’s money market closed with overnight and repo lending rates largely unchanged, supported by sustained excess liquidity within the financial system and increased placements at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF).
Market conditions remained relatively calm in the absence of fresh open market operations by the monetary authority, despite a strong liquidity backdrop. In the preceding week, the CBN had absorbed approximately ₦4 trillion through OMO bill issuances, alongside conducting a Treasury bill auction.
Analysts note that the central bank may soon return to the market with additional OMO bill offerings, as liquidity levels have expanded significantly. Current projections are tied to anticipated inflows of ₦2.14 trillion from OMO maturities scheduled for 27 January 2026.
According to market data, liquidity in the financial system closed at a net long position of ₦3.88 trillion, up from ₦2.78 trillion recorded at the end of the prior week. The improvement was driven primarily by deposit money banks’ placements with the CBN, which rose to ₦3.80 trillion—an increase of ₦1.14 trillion from the previous close.
Further liquidity support came from bond coupon inflows totaling ₦21.61 billion, reinforcing the surplus condition across the system.
As a result, funding costs remained stable, with the overnight (O/N) lending rate holding at 22.79%, while the open repo rate (OPR) closed unchanged at 22.50%.
Activity in the Nigerian Treasury Bills (NTB) secondary market remained positive, as the average benchmark yield declined by 3 basis points to settle at 18.46%. The movement was largely attributed to renewed investor interest in longer-tenor bills.
Conversely, the secondary market for OMO bills recorded a mildly bearish tone, with average benchmark yields edging up by 1 basis point to close at 22.16%, reflecting cautious positioning amid expectations of potential supply.
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