Short-term funding costs in Nigeria’s money market showed divergent trends on Thursday, following the settlement of Nigerian Treasury Bills (NTB) auction conducted midweek. Despite large inflows from matured OMO instruments earlier in the week, the market remained sensitive to liquidity fluctuations.
While most Nigerian Interbank Offered Rates (NIBOR) trended upward, the overnight rate (OVN) eased slightly, dropping by 2 basis points, as reported by Cowry Asset Management. The Open Repo Rate (OPR) held steady at 26.50%, while the OVN rate climbed modestly to 26.96%.
Market analysts attributed the mixed movement in rates to ongoing liquidity management by banks, some of which accessed the Central Bank’s standing lending facility to support short-term operations.
Meanwhile, the yield curve for Nigerian Treasury Bills in the secondary market continued its downward trajectory, with average yields falling by 7 basis points to 20.72%. This bullish sentiment in the NTB space signals strong investor demand for government debt amid economic uncertainties.
Despite debits for the NTB and OMO auction settlements, interbank system liquidity remained positive, reflecting an excess inflow from the earlier maturing bills totaling ₦1.14 trillion. This helped anchor short-term rates at current levels.
Market observers expect the trend of stable funding costs to continue, barring any significant liquidity shocks or policy shifts from the monetary authorities.
