Interbank interest rates remained largely unchanged in the Nigerian money market, supported by ample system liquidity and reduced funding pressures, according to separate reports from investment banking firms.
Deposit money banks continued to channel excess cash into the Central Bank’s facilities, positioning ahead of anticipated monetary easing measures expected in the first quarter of 2026.
Market data showed no funding requests at the Standing Lending Facility window, reflecting the absence of liquidity stress across the banking system. Average daily liquidity in December declined slightly by one percent to ₦3.23 trillion, down from ₦3.35 trillion recorded in November.
Short-term money market rates continued to trade near the policy floor, influenced by recent asymmetric adjustments around the Monetary Policy Rate. Interbank rates averaged close to 23 percent during the fourth quarter, reflecting stable conditions amid elevated liquidity.
The financial system opened the first trading session of the new year with a positive liquidity balance of ₦3.36 trillion, although this was lower than the ₦3.89 trillion recorded at the close of the previous week.
Week-on-week liquidity levels moderated slightly, driven by reduced placements at the Standing Deposit Facility as the year-end period concluded. Market reports indicated that system liquidity peaked at ₦5.15 trillion on December 30, bolstered by ₦594 billion in Open Market Operation maturities.
Liquidity levels eased to ₦3.82 trillion on December 31, reflecting a decline in SDF placements. Banks’ deposits at the Central Bank settled at ₦2.92 trillion as financial institutions sought returns of approximately 24.5 percent from the apex bank’s deposit facility.
By the end of the week, overall system liquidity moderated to ₦3.36 trillion. Despite the reduction, funding conditions in the interbank market remained stable.
Both the Open Buy Back (OBR) rate and overnight lending rate closed the week unchanged at 22.50 percent and 22.75 percent, respectively, underscoring the continued influence of strong liquidity buffers across the financial system.
Market participants expect interbank rates to remain broadly stable in the near term, barring significant shifts in Central Bank liquidity management or unexpected funding pressures.
