Money market rates declined on Tuesday as inflows from Remita and state allocations boosted liquidity in the financial system. The ample liquidity also saw banks channel excess funds into the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF), amid a lack of funding pressures.
System liquidity ended the day in surplus, closing above ₦534 billion. As a result, benchmark short-term interest rates remained contained, reflecting the improved liquidity conditions.
The Nigerian Interbank Offered Rate (NIBOR) fell across all tenors, with the Overnight Policy Rate (OPR) dipping 9 basis points to 26.58%, while the Overnight Rate (O/N) declined 17 basis points to 27.04%.
According to TrustBanc Financial Group Limited, system liquidity surged by 84% to ₦534.3 billion, driven by deposit money banks (DMBs) placing a total of ₦716.22 billion in the CBN’s SDF window.
Analysts noted that, barring any major outflows, liquidity is expected to remain stable in the near term, with funding rates hovering around current levels.
In the secondary market, bullish sentiment persisted as the Nigerian Interbank Treasury Bills True Yield (NITTY) curve trended lower across most tenors. The exception was the 3-month tenor, which rose slightly by 0.04% to 19.10%. Despite this, sustained investor demand continued to push average yields lower.
