By Boluwatife Oshadiya | August 27, 2026
Key Points
- Nigeria’s financial system liquidity rises 35.53% to ₦7.40 trillion as banks record stronger inflows
- Overnight funding rate falls two basis points to 22.12%, while the Open Repo Rate remains at 22.00%
- Treasury bill yields move in opposite directions as the average secondary-market yield rises to 18.87%
Main Story
Nigeria’s financial system liquidity rose 35.53% to ₦7.40 trillion on Wednesday, easing pressure in the interbank market and pushing the overnight funding rate lower.
AIICO Capital Limited attributed the liquidity increase to coupon inflows and stronger placements at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility, according to a market note.
The liquidity position was also supported by expectations of about ₦2.32 trillion in inflows from Open Market Operations (OMO) maturities, although the CBN conducted an auction that absorbed approximately ₦2.8 trillion from the financial system.
The higher liquidity buffer reduced the need for banks to seek short-term funding from the CBN. Market reports indicated that there was no recourse to the Standing Lending Facility on Wednesday, suggesting that banks had sufficient funds to meet immediate obligations.
The improved liquidity position was reflected in money-market rates. The overnight rate declined by two basis points to 22.12%, while the Open Repo Rate remained unchanged at 22.00%.
Trading in the Treasury bills secondary market was mixed. Yields on one-month and three-month instruments increased by 20 basis points and 27 basis points, respectively, while six-month and 12-month yields declined by five basis points each.
Despite the divergent movement across maturities, increased trading activity lifted the average Treasury bill yield by two basis points to 18.87%, according to the market report.
What’s Being Said
AIICO Capital Limited said system liquidity reached ₦7.40 trillion, supported by coupon inflows and stronger placements at the CBN’s Standing Deposit Facility.
Market analysts reported that the absence of borrowing through the Standing Lending Facility reduced pressure on interbank rates, while the liquidity surplus kept short-term funding conditions relatively comfortable.
What’s Next
- The market will monitor the expected ₦2.32 trillion OMO maturity inflows and their impact on system liquidity
- Banks’ use of the CBN’s Standing Deposit and Lending Facilities will provide a signal on near-term funding pressure
- Treasury bill yields will remain sensitive to liquidity conditions, government borrowing and further CBN open-market operations
Bottom Line
The Bottom Line: The sharp increase in system liquidity is easing immediate funding pressure and allowing overnight rates to drift lower. However, continued CBN sterilisation through OMO auctions could moderate the surplus and keep money-market conditions sensitive to liquidity management.
