Nigeria’s interbank money market witnessed mixed movements this week as a decline in liquidity surplus reshaped short-term funding dynamics across the financial system. According to investment analysts, market liquidity opened the week at a relatively solid ₦2.03 trillion, though notably lower than previous levels.
The available liquidity was buoyed by inflows totaling ₦29.18 billion from the Federal Government’s 2033 Sukuk bond coupon payments. Additionally, commercial banks continued to place excess cash at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF), which currently offers a rate of 24.5%.
This activity comes amid the backdrop of reduced yields on Nigerian Treasury Bills (NTBs) following the CBN’s recent interest rate adjustment, which has moderated returns across different tenors.
In the interbank space, overnight lending rates remained stable at 24.86% after last week’s auctions and maturities. Meanwhile, medium-term rates experienced mild corrections, with the 1-month, 3-month, and 6-month maturities falling by 10 basis points (bps), 18 bps, and 25 bps, respectively.
Funding costs presented a mixed picture, as the overnight rate dropped slightly by 7 bps to 24.90%, while the Open Purchase Rate (OPR) held steady at 24.85%.
On the Treasury Bills secondary market, yields advanced across most maturities on Monday, with the 1-month, 3-month, 6-month, and 12-month papers climbing by 12 bps, 28 bps, 0.5 bps, and 5 bps, respectively, according to data from Cowry Asset Management Limited.
Despite these yield increases, the average NT-Bills yield edged down by a marginal 1 bp to 17.39%, reflecting ongoing investor optimism and sustained buying pressure in the secondary market.
Looking ahead, analysts project that liquidity conditions may improve due to an anticipated inflow of ₦481.33 billion from an upcoming OMO maturity. However, they cautioned that any potential liquidity mop-up operation by the apex bank could dampen the expected moderation in funding costs.
