By Boluwatife Oshadiya | August 10, 2026
Key Points
- Financial system liquidity rises 36% week-on-week to ₦4.08 trillion from ₦3.00 trillion
- OPR holds at 22.00% while overnight rate falls four basis points to 22.10%
- Primary market repayments and stronger Standing Deposit Facility placements drive the liquidity surplus
Main Story
Nigeria’s financial system liquidity rose 36% week-on-week to ₦4.08 trillion from ₦3.00 trillion, easing short-term funding pressures and leaving money market rates mixed, according to Cowry Asset Management Limited.
The liquidity increase was driven primarily by ₦2.45 trillion in primary market repayments and stronger bank placements of about ₦2.60 trillion at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF), according to market data cited by Cowry Asset.
The combined inflows lifted the opening net surplus balance above ₦5.00 trillion, strengthening liquidity conditions across the banking system. Despite the surplus, the CBN continued its liquidity management operations through Open Market Operations (OMO) auctions.
The Open Repo Rate (OPR) remained unchanged at 22.00%, while the overnight (OVN) rate declined by four basis points to 22.10%, reflecting the improved liquidity position and reduced immediate funding pressure.
The Nigerian Interbank Offered Rate (NIBOR) curve also moderated across maturities during the review period. The movement indicates that stronger system liquidity is feeding through to interbank funding conditions even as the CBN maintains a restrictive monetary policy stance.
Banks also increased demand at the CBN’s OMO bills auction, where an average spot rate of about 20% was offered to market participants. The activity points to continued investor demand for short-term naira-denominated instruments and provides the central bank with an avenue to absorb surplus liquidity.
Market funding conditions nevertheless remained relatively stable during the period, with the increase in liquidity yet to trigger a corresponding sharp decline in benchmark funding rates.
What’s Being Said
Cowry Asset Management Limited attributed the improvement in system liquidity primarily to the ₦2.45 trillion in primary market repayments and increased placements at the CBN’s SDF window.
The firm’s assessment indicates that the stronger liquidity position has reduced short-term funding pressure, although ongoing CBN liquidity operations remain important in determining the direction of money market rates.
What’s Next
- OMO bills are expected to provide another channel for the CBN to absorb excess liquidity from the banking system
- A midweek Treasury Bills auction is also expected to further reduce surplus liquidity
- Interbank funding rates are expected to remain broadly range-bound in the near term if current liquidity conditions persist
Bottom Line
The Bottom Line: The sharp increase in system liquidity is easing immediate funding pressure without triggering a major decline in benchmark rates. The direction of money market rates will increasingly depend on how effectively upcoming OMO and Treasury Bills auctions absorb the surplus.
