Excess liquidity in the Nigerian banking system helped maintain stability in short-term benchmark interest rates, despite a N400 billion cash reserve debit on Friday. With minimal funding pressures, both the open repo rate and the overnight lending rate held steady at around 27%.
This calm was further reflected in a decrease in borrowing from the Central Bank’s standing lending facility, attributed to the lack of primary market auctions.
At the start of the week, the banking system’s surplus fund stood at N906.85 billion, with minimal outflows, helping to keep the Open Repo (OPR) rate unchanged at 26.50%. However, the overnight rate saw a slight increase of 9 basis points, settling at 26.95%.
Looking ahead, analysts anticipate that inflows from Nigerian Treasury bills net repayments, estimated at about ₦127 billion, will further bolster liquidity in the financial system this week. However, despite the liquidity influx, the Nigerian Interbank Offered Rate (NIBOR) rose across all tenors.
