By Boluwatife Oshadiya | September 3, 2026
Key Points
- CBN settlements for Treasury bills and Open Market Operations reduced system liquidity despite a ₦2.48 trillion inflow from OMO maturities
- Interbank surplus fell from ₦4.35 trillion to ₦3.57 trillion while average funding cost rose eight basis points week-on-week to 22.13%
- Overnight lending rate climbed 15 basis points to 22.25% as banks accessed ₦15.80 billion through the Standing Lending Facility
Main Story
Nigeria’s money market tightened as Central Bank of Nigeria (CBN) Treasury bill and Open Market Operation (OMO) settlements absorbed liquidity, pushing the system surplus down to ₦3.57 trillion.
According to Cowry Asset Limited, the liquidity position moderated from an opening surplus of ₦4.35 trillion after Treasury bill sales generated ₦1.45 trillion in debits and OMO settlements accounted for another ₦2.60 trillion.
The CBN had conducted a midweek Treasury bill auction before carrying out an OMO auction the following day, sterilising about ₦2.5 trillion through the allotment of OMO bills. The combined settlements placed pressure on short-term funding conditions.
The outflows were partly offset by approximately ₦2.48 trillion in OMO maturities, leaving the banking system with a sizeable liquidity surplus of ₦3.57 trillion, Cowry Asset said.
Despite the surplus, average funding costs increased eight basis points week-on-week to 22.13%. The overnight lending rate also rose 15 basis points to 22.25% at the close of trading, while the Open Repo Rate remained at 22.00%.
Financial-system liquidity opened at ₦4.07 trillion and reached an intraday peak of ₦6.81 trillion, supported by OMO maturities and bank placements at the CBN’s Standing Deposit Facility window.
Some banks nevertheless required additional short-term funding, borrowing ₦15.80 billion through the Standing Lending Facility, according to Cowry Asset.
“The outflows were partly offset by approximately ₦2.48 trillion in OMO maturities,” Cowry Asset Limited said in its market assessment.
What’s Being Said
Cowry Asset’s assessment indicates that the market remains liquid in absolute terms, but the simultaneous settlement of government securities has increased the cost of accessing very short-term funds.
The pattern suggests that liquidity management, rather than an outright shortage of funds, is currently driving movements in overnight rates.
What’s Next
- Banks will monitor further CBN liquidity operations and upcoming Treasury bill and OMO maturities
- Money-market participants will watch whether the ₦3.57 trillion surplus translates into lower overnight funding costs in subsequent sessions
Bottom Line:
The money market remains comfortably liquid, but CBN sterilisation is beginning to transmit into higher short-term funding costs. The key market signal is whether continued OMO and Treasury bill activity can sustain the tightening without materially constraining bank liquidity.a
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