Nigeria’s money market recorded mixed movements across key short-term interest rates on Tuesday, even as overall liquidity levels in the financial system rose sharply due to substantial inflows.
Short-term benchmark interest rates have remained below 23% following the adjustment to the asymmetric corridor around the Monetary Policy Rate introduced in November. Despite elevated liquidity, rate movements continued to show divergence across several tenors.
Market liquidity opened with a surplus of ₦3 trillion—an increase of ₦847.7 billion from the previous day—driven largely by a ₦772.9 billion OMO maturity and a ₦10.2 billion bond coupon inflow, according to figures from AIICO Capital Limited.
Deposit Money Banks have also reduced placements at the Central Bank’s Standing Deposit Facility (SDF), following a rate adjustment from 24.50% down to 22.50%. Total placements at the window slipped by 0.2% to ₦1.99 trillion. Analysts noted that banks may continue adjusting positions intermittently as they assess opportunities to increase treasury-related investments.
Data from Cowry Asset Limited showed that the Nigerian Interbank Offered Rates rose across all tenors. The overnight rate increased by 2 basis points to 22.80%, signalling tightening liquidity across the system. The 1-month, 3-month, and 6-month rates also climbed by 31, 45, and 33 basis points, respectively.
Funding costs in the money market displayed varying patterns, with the Overnight rate easing slightly by 6 basis points to 22.79%, while the Open Repo Rate remained unchanged at 22.50%.
Treasury-bill activity was subdued as the average yield on Nigerian Treasury Bills edged up 1 basis point to 16.83%, reflecting cautious positioning among investors and limited appetite for short-term debt instruments.
