Money market indicators moved in different directions during the week as liquidity conditions across Nigeria’s financial system oscillated, ending the period with a net surplus position amid sustained activity at the Central Bank of Nigeria (CBN) windows.
There was no Primary Market Auction (PMA) during the period, although the system benefited from inflows linked to the maturity of Open Market Operation (OMO) bills. Meanwhile, borrowing at the CBN’s standing facilities dropped sharply, contributing to shifting liquidity dynamics.
Liquidity conditions were notably volatile throughout the week. The system opened in a tight position before improving midweek and eventually closing stronger than it began.
According to data from AIICO Capital Limited, system liquidity started the week at ₦1.47 trillion, supported by primary market inflows, even as placements at the Standing Deposit Facility (SDF) declined.
The surplus position strengthened significantly during the week, rising to ₦2.21 trillion following an ₦810.10 billion inflow from the 13 January 2026 OMO maturity. This was partly offset by ₦101.50 billion in borrowing at the CBN’s Standing Lending Facility (SLF).
By midweek, liquidity moderated slightly to ₦2.07 trillion. This adjustment came despite a sharp increase in SDF placements, which climbed from ₦1.40 trillion to ₦1.99 trillion, indicating cautious positioning by deposit money banks (DMBs).
Funding conditions, however, tightened marginally. Average funding rates edged up by 1 basis point to 22.61%. On Thursday, system liquidity rebounded to ₦2.13 trillion, supported by sustained DMB placements, though partially offset by ₦341.64 billion in primary market inflows.
By Friday, liquidity eased marginally to ₦2.11 trillion. DMB placements at the SDF window rose further to ₦1.94 trillion, alongside a modest ₦535.41 million inflow from repayments.
Overall, system liquidity improved week-on-week by ₦686.04 billion. Average funding costs declined slightly by 1 basis point to 22.60%, with the Open Repo Rate (OPR) unchanged at 22.50%. The Overnight Rate softened by 2 basis points to close at 22.69%.
In the treasury bills market, the Nigerian Treasury Bills (NTB) secondary market ended the week on a bearish note. Average benchmark yields expanded by 15 basis points week-on-week to 18.32%, as investors repositioned ahead of a sizeable auction scheduled for next week, where the Debt Management Office (DMO) is expected to roll over more than ₦1.15 trillion in maturities.
The secondary OMO market followed a similar trajectory. Average benchmark yields surged by 116 basis points to settle at 22.26%, driven by intense selling pressure, particularly at the short and mid segments of the yield curve.
Looking ahead, the system is expected to receive ₦725.19 billion from the 22 January 2026 NTB maturity and ₦1.30 trillion from the 20 January 2026 OMO maturity. These inflows are likely to keep liquidity conditions relatively strong, even as midweek auction-related outflows are anticipated.
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