Nigeria’s short-term interest rates held steady on Thursday, as coupon payments eased liquidity pressure in the banking system despite large-scale open market operations (OMO) conducted by the Central Bank of Nigeria (CBN).
Liquidity in the financial system closed at ₦390.89 billion, representing a decline of ₦624.68 billion following the apex bank’s liquidity mop-up. The CBN had earlier floated ₦600 billion worth of OMO bills aimed at curbing excess liquidity in circulation.
Subscription levels were robust, reaching ₦1.015 trillion, with allotments totaling ₦897.19 billion, largely taken up by FPIs and Nigerian banks. AIICO Capital Limited reported that money market rates spiked as high as 32.5% earlier in the day due to auction funding pressures, but later moderated after a ₦392.74 billion bond coupon injection provided relief to the system.
The interbank market recorded marginal increases across maturities: the overnight rate climbed 1.03%, while the 1-month, 3-month, and 6-month tenors rose by 1.30%, 1.43%, and 1.21%, respectively. However, the Open Repo Rate (OPR) and overnight lending rate remained relatively flat at 26.50% and 27.00%.
Analysts expect rates to remain stable barring any unforeseen liquidity shocks. On the treasury bills market, yields on the 1-month, 3-month, and 6-month tenors fell by 19bps, 32bps, and 9bps, respectively, while the 12-month tenor rose by 63bps to 20.35%, according to Cowry Asset Limited.
The average yield on Nigerian Treasury Bills also dipped slightly by 1bps to 18.07%, reflecting sustained investor appetite for short-term instruments in the secondary market.
