By Markets Desk | September 7, 2026
Key Points
- Financial system liquidity rose to ₦4.66 trillion from ₦3.61 trillion the previous week
- Banks placed about ₦4.4 trillion at the CBN’s Standing Deposit Facility, while ₦2.3 trillion in primary market repayments supported liquidity
- Overnight money-market rates fell 13 basis points to 22.13%, while the Open Repo Rate remained at 22.00%
Main Story
Money market rates eased last week as Nigeria’s banking system recorded a larger liquidity surplus, reducing immediate funding pressure on financial institutions.
Financial system liquidity increased to ₦4.66 trillion from ₦3.61 trillion a week earlier, with approximately ₦4.4 trillion placed at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF), according to Cowry Asset Limited.
The investment firm said about ₦2.3 trillion in primary market repayments also provided additional liquidity support during the period, although CBN open market operation (OMO) settlements exerted downward pressure as the central bank continued its sterilisation activities.
No activity was recorded at the Standing Lending Facility, indicating that banks did not face significant short-term funding shortages during the review period.
The improved liquidity position helped keep money-market rates relatively stable. The overnight rate declined by 13 basis points to 22.13%, while the funding rate remained unchanged at 22.00%.
However, Nigerian Interbank Offered Rate (NIBOR) rates moved higher across the curve, reflecting market expectations that liquidity conditions could tighten as the CBN continues its liquidity-management operations.
The liquidity position has strengthened considerably in recent months. System liquidity rose 56.17% in August to ₦4.65 trillion from ₦2.98 trillion in July, supported by inflows from maturing securities, Federation Account Allocation Committee (FAAC) allocations and other repayments, according to Cowry Asset.
The Financial Market Dealers Association (FMDA) projects total system inflows of ₦15.72 trillion in September, up 16.10% from ₦13.54 trillion recorded in August.
What’s Being Said
Cowry Asset analysts said NIBOR rates increased across the curve as market participants anticipated tighter liquidity conditions despite the system’s current surplus.
Note: A verified direct quotation from Cowry Asset or another named market source should be inserted before publication to comply fully with the Daily News Brief quotation requirement.
What’s Next
- The CBN’s OMO operations and Treasury bill auctions will determine how much excess liquidity remains in the banking system
- September inflows are expected to reach ₦15.72 trillion, with OMO maturities projected to account for about 74% of total inflows
- Market participants will monitor whether the projected inflows outweigh further CBN liquidity sterilisation
Bottom Line
The Bottom Line: Nigeria’s banking system is entering September with substantial liquidity, keeping immediate funding pressure contained. However, the combination of continued CBN sterilisation and rising NIBOR rates suggests that surplus liquidity alone may not prevent short-term funding conditions from tightening.
