By Boluwatife Oshadiya | March 24, 2026
Key Points
- Banks increase deposits at CBN’s SDF window to ₦8.2 trillion amid excess liquidity
- Overnight rate rises to 22.27% while OPR holds steady at 22.00%
- Analysts expect liquidity to tighten following ₦2.4 trillion OMO debits
Main Story
Nigeria’s money market rates showed mixed movements at the start of the week as strong system liquidity drove increased bank placements at the Central Bank of Nigeria’s Standing Deposit Facility (SDF).
Total deposits at the SDF rose to approximately ₦8.2 trillion, reflecting banks’ preference for low-risk returns amid constrained lending conditions in the real sector. The financial system opened the week with similarly elevated liquidity levels, although this moderated slightly to ₦8.15 trillion following Treasury bill auction settlements.
Data from FMDQ indicated that the overnight lending rate edged up by 6 basis points to 22.27%, while the Open Repo Rate (OPR) remained unchanged at 22.00%. The marginal increase reflects short-term funding adjustments despite overall liquidity strength.
Meristem Securities noted that system liquidity had expanded significantly from ₦6.6 trillion the previous week, supported by inflows tied to market operations. However, a ₦691.86 billion outflow from primary market sales contributed to the early-week moderation.
Market participants are increasingly turning to the SDF as an alternative income stream, particularly following recent Treasury bill issuances that reshaped short-term yield dynamics.
What’s Being Said
“System liquidity moderated slightly due to primary market settlements, but remains robust,” said analysts at Meristem Securities Limited.
Market analysts also noted that “anticipated OMO debits will likely reduce excess liquidity and influence short-term rates in the coming sessions.”
What’s Next
- The CBN is expected to conduct OMO operations this week, potentially mopping up ₦2.4 trillion in liquidity
- Money market rates may adjust further depending on liquidity tightening and policy signals
- Treasury bill yields will remain a key indicator for short-term investment flows
Bottom Line
The Bottom Line: Persistent excess liquidity is masking underlying credit constraints in the real economy, as banks increasingly favour risk-free central bank instruments over private sector lending.
