By Boluwatife Oshadiya October 26, 2026
Key Points
- Net banking system liquidity surplus rises to ₦6.94 trillion on Friday from ₦6.28 trillion the previous week, according to Cowry Asset Management
- Banks’ balances at the CBN’s Standing Deposit Facility reach ₦7.9 trillion as substantial maturities add funds to the system
- Overnight funding rates ease or hold steady while NIBOR rates rise across all tracked tenors, with the six-month rate reaching 21.54%
Main Story
Nigeria’s banking system liquidity surplus rose to ₦6.94 trillion by Friday’s close, from ₦6.28 trillion a week earlier, even as interbank funding rates moved in different directions, according to Cowry Asset Management Limited.
The increase followed substantial inflows from matured financial instruments. The supplied market report recorded approximately ₦2.1 trillion from matured Open Market Operation (OMO) bills, ₦392.8 billion from expired Treasury bills and ₦330 billion from primary market repayments. System liquidity reportedly peaked at ₦8.4 trillion during the week.
Banks’ balances at the Central Bank of Nigeria’s Standing Deposit Facility (SDF) climbed to ₦7.9 trillion, indicating that deposit money banks were placing substantial funds with the apex bank rather than deploying all available liquidity into the interbank market.
The CBN conducted one OMO auction on Thursday, with the report putting the amount raised at ₦2.6 trillion. The source material describes the operation as helping refinance maturing OMO obligations, but the auction details should be checked against the original market report.
Despite the liquidity surplus, short-term rates showed mixed movements. The open repo rate remained at 20%, while the overnight rate eased by two basis points to 20.36% from 20.38% the previous week.
By contrast, the Nigerian Interbank Offered Rate (NIBOR) rose across the reported tenors. The overnight rate increased by four basis points to 20.29%, while the one-month, three-month and six-month rates climbed by 45, 77 and 126 basis points to 20.73%, 21.09% and 21.54%, respectively.
What’s Being Said
Cowry Asset Management’s reported market assessment links the liquidity increase to matured instruments and repayments. However, the supplied material contains no direct quotation from the firm or an independent analyst explaining why longer-tenor NIBOR rates increased despite abundant system liquidity.
What’s Next
- Monitor the CBN’s subsequent OMO operations for evidence of further liquidity absorption.
- Track overnight funding costs and NIBOR rates to determine whether the divergence between short- and longer-tenor rates persists.
Bottom Line
The Bottom Line: Abundant banking liquidity has not translated into uniform declines across money-market rates. The divergence suggests that liquidity levels alone are insufficient to explain pricing across tenors; the timing of cash flows and expectations about future funding conditions also require attention.
