By Boluwatife Oshadiya | July 20, 2026
Key Points
- Nigeria’s banking system ended the week with a ₦4.68 trillion liquidity surplus, keeping short-term interest rates broadly stable
- FAAC disbursements and Treasury bill and OMO maturities offset nearly ₦5 trillion sterilised by the Central Bank of Nigeria (CBN) through OMO and Treasury bill auctions
- Analysts expect liquidity conditions to remain comfortable this week, supported by ₦1.63 trillion in expected inflows from maturing securities
Main Story
Nigeria’s financial system remained awash with liquidity last week, ending with a ₦4.68 trillion surplus despite aggressive liquidity mop-up operations by the Central Bank of Nigeria (CBN), helping to keep money market rates largely stable.
The strong liquidity position was supported by ₦2.55 trillion in Federation Account Allocation Committee (FAAC) disbursements, alongside ₦900 billion in Open Market Operations (OMO) bill maturities and ₦600 billion from Treasury bill maturities. These inflows largely offset approximately ₦5 trillion sterilised by the apex bank through OMO and Treasury bill auctions between Monday and Wednesday.
According to data from the FMDQ platform, the Open Repo Rate (OPR) remained unchanged at 22.00%, while the Overnight (O/N) Rate eased slightly to 22.13% from 22.23% recorded the previous week, indicating that funding conditions across the banking system remained comfortable.
Investment firm Cowry Asset Limited said the banking system’s net liquidity surplus increased from ₦4.33 trillion in the previous week to ₦4.68 trillion despite the settlement of two OMO auctions worth about ₦3.8 trillion and a further ₦1.2 trillion Treasury bill auction conducted by the CBN.
However, activity in the interbank market reflected a modest tightening in funding costs. The Nigerian Interbank Offered Rate (NIBOR) rose across all tenors, with the overnight rate increasing by 2 basis points to 22.21%, while the one-month, three-month and six-month rates climbed to 22.39%, 22.70% and 22.92%, respectively.
Analysts attributed the increase to cautious liquidity management by deposit money banks following the settlement of the CBN’s debt auctions, despite the prevailing excess cash within the financial system.
What’s Being Said
“These maturities should provide sufficient liquidity to keep short-term funding rates broadly stable,” Cowry Asset Limited said in its latest market update.
Market analysts also noted that the combination of FAAC allocations and maturing government securities has continued to cushion the impact of the CBN’s liquidity sterilisation efforts, preventing a sharp rise in interbank borrowing costs.
What’s Next
- Approximately ₦1.63 trillion is expected to flow into the banking system this week, comprising ₦378.43 billion in Treasury bill maturities and ₦1.25 trillion in OMO bill maturities.
- Market participants will monitor whether the CBN conducts additional liquidity mop-up operations through fresh OMO auctions.
- Investors will also watch movements in interbank rates for signs of changing liquidity conditions ahead of future government debt issuances.
Bottom Line: Nigeria’s banking system continues to demonstrate resilient liquidity despite the CBN’s aggressive monetary tightening strategy. As long as inflows from FAAC distributions and maturing securities continue to offset liquidity withdrawals, short-term interest rates are likely to remain stable, giving banks adequate room to meet funding obligations while supporting orderly money market conditions.
