Nigeria’s excess liquidity rises 33% after ₦2.07tn OMO repayment

By Boluwatife Oshadiya | October 21, 2026

Key Points

• Excess liquidity in Nigeria’s financial system rose 32.45% to ₦7.74 trillion from ₦5.84 trillion following an OMO bill maturity
• Banks’ placements at the Central Bank of Nigeria’s Standing Deposit Facility reached ₦5.46 trillion, according to AIICO Capital Limited
• The overnight NIBOR fell four basis points to 20.21%, while the overnight funding rate eased 14 basis points to 20.30%

Main Story

Excess liquidity in Nigeria’s financial system rose 32.45% to ₦7.74 trillion from ₦5.84 trillion on Tuesday, supported by a ₦2.07 trillion Open Market Operations (OMO) bill maturity and the Central Bank of Nigeria’s absence from OMO activity.

The repayment, which matured on October 20, increased available funds in the banking system and helped moderate short-term money market rates. Banks’ placements at the CBN’s Standing Deposit Facility rose to ₦5.46 trillion, according to AIICO Capital Limited, indicating that lenders had substantial funds to place with the central bank.

The Nigerian Overnight Financing Rate (NOFR) remained at 20%, while the overnight Nigerian Interbank Offered Rate (NIBOR) declined by four basis points to 20.21%. The Overnight (O/N) rate also fell by 14 basis points to 20.30%, while the Open Repo Rate (OPR) held steady at 20.00%.

AIICO Capital reported no activity at the Standing Lending Facility, a development consistent with the absence of reported funding pressure in the market. However, the available report does not establish that all banks had surplus funds or faced no individual liquidity constraints.

Market conditions could change as government debt settlements absorb funds from the financial system. The market report anticipates a reduction in surplus liquidity following the settlement of ₦1.21 trillion in October Federal Government of Nigeria bonds.

Investment firms also expect the CBN to conduct an OMO bill auction to mop up excess cash. Such an operation would withdraw liquidity from the banking system and could influence short-term funding rates, depending on the amount offered and investor demand.

What’s Being Said

AIICO Capital Limited’s market assessment points to substantial excess funds, with banks’ Standing Deposit Facility placements at ₦5.46 trillion and no reported Standing Lending Facility activity. The supplied report does not include a direct quotation from the firm.

Market participants expect government bond settlement and a possible CBN OMO auction to reduce surplus liquidity. No named independent analyst quotation was provided in the source material.

What’s Next

• The market will absorb the reported ₦1.21 trillion October FGN bond settlement, which is expected to reduce surplus funds.
• Investors will watch for a possible CBN OMO bill auction; no auction date or amount was supplied.
• Short-term rates will remain sensitive to changes in system liquidity and the CBN’s market operations.

The Bottom Line: The liquidity increase is easing immediate pressure on short-term funding rates, but the surplus may prove temporary. Government bond settlements and any subsequent CBN liquidity mop-up will help determine whether money market rates remain stable.