The banking system witnessed an improvement in liquidity as a ₦1.3 trillion inflow from matured Treasury bills bolstered financial market liquidity on Thursday. Analysts reported a decline in interbank rates following the non-refinancing of these Treasury bills, which provided relief to the financial system.
Despite the improved liquidity, the financial system remained in a net deficit position, even after credit adjustments from the Nigerian Treasury Bills (NTB) auction settlement. As a result, interbank lending rates remained elevated, with the Overnight Policy Rate (OPR) and Overnight Rate (O/N) closing at 32.25% and 32.67%, respectively.
Market analysts, however, anticipate a further easing of interbank rates, supported by expected inflows from FGN bond coupon payments scheduled for tomorrow. Reflecting the shifting market dynamics, the Nigerian Interbank Offered Rate (NIBOR) trended upward across most tenors, except for the overnight rate, which saw a 0.17% decline to 32.75%, indicating a gradual improvement in banking sector liquidity.
Meanwhile, key money market indicators also edged lower. The Open Repo Rate (OPR) dropped by 0.04% to 32.25%, while the overnight lending rate fell by 0.16% to 32.67%, reinforcing expectations of a short-term decline in borrowing costs as liquidity conditions improve.
