Excess liquidity in Nigeria’s banking system has continued to support tight short-term benchmark interest rates, with no signs of a funding shock. This comes despite a ₦185.9 billion outflow for bond settlement earlier in the week.
Market data from AIICO Capital showed that liquidity levels rose by ₦155.7 billion to close at ₦1.3 trillion, driven largely by a ₦459.0 billion increase in the standing deposit facility.
Interbank rates showed mixed performance, with the Open Repo Rate (OPR) flat at 26.50%, while the Overnight (O/N) rate dropped slightly by 12 basis points to 26.88%, suggesting improved liquidity conditions.
Analysts forecast that rates will remain moderate, supported by over ₦1 trillion in expected system liquidity, barring any major outflows.
On Wednesday, the Nigerian Interbank Offered Rate (NIBOR) posted mixed results. The overnight and 1-month tenors rose by 4 basis points each, while the 3-month and 6-month benchmarks dropped by 17 and 25 basis points, respectively, according to Cowry Asset Limited.
In the Nigerian Treasury Bills (NITTY) market, yields fell across most maturities, signaling a shift in investor sentiment. However, in the secondary market, average treasury bill yields rose 14 basis points to 17.76%, driven by sell-side pressure despite overall softening on the curve.
