Interbank lending rates remained stable last week as Nigeria’s financial system recorded a substantial liquidity surplus exceeding N3.2 trillion, fuelled by massive inflows from maturing short-term instruments and increased placements at the Central Bank of Nigeria (CBN)’s deposit window.
Money market analysts reported that system liquidity closed the week at N3.20 trillion, reflecting an increase of N1.242 trillion following a combination of auction settlements and repayments.
The market witnessed significant inflows, including N772.93 billion from matured Open Market Operations (OMO) bills and N805.88 billion from treasury bill maturities, which outweighed the outgoing N709.62 billion used to settle the latest auction.
Banks also strengthened their placements at the CBN’s Standing Deposit Facility (SDF), helping to maintain comfortable liquidity conditions and keeping short-term benchmark rates within a tight range.
Both the Overnight Rate (OVN) and the Repo Rate remained largely stable, supported by the CBN’s adjusted monetary policy corridor introduced in November.
During the week, the CBN offered N700 billion worth of treasury bills but allotted N709.62 billion across the 91-day, 182-day, and 364-day maturities, indicating strong investor appetite.
For the week ahead, the money market expects liquidity to remain elevated due to anticipated inflows of N512 billion from treasury bills and N1.08 trillion from OMO repayments.
Despite the liquidity boost, average interbank funding rates held firm at 22.61%. The Open Repo rate (OPR) closed unchanged at 22.50%, while the Overnight Lending Rate inched up marginally by 1 basis point to 22.72%.
Financial analysts anticipate a slight decline in funding costs in the coming week—provided no unexpected funding pressures arise.
System liquidity remained robust throughout November, averaging N3.3 trillion, up from October’s average of N2.9 trillion. This stability was supported by consistent OMO and treasury bill maturities, recurring placements at the CBN’s SDF window, and periodic coupon inflows from government bonds.
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