By Boluwatife Oshadiya | September 4, 2026
Key Points
- Overnight lending rate rises two basis points to 22.20% as system liquidity falls after Treasury bills settlement
- Financial system liquidity opens at ₦3.66 trillion, down ₦930 billion from Wednesday’s close
- Analysts expect liquidity to remain comfortable as ₦734.81 billion in matured Treasury bills returns to the system
Main Story
Nigeria’s overnight lending rate rose two basis points to 22.20% as financial system liquidity tightened following the Central Bank of Nigeria’s Treasury bills auction settlement.
The open buyback rate remained unchanged at 22.00%, maintaining the floor it has held, while system liquidity opened at a credit balance of ₦3.66 trillion, according to Herwood Securities Limited.
The opening liquidity position represented a ₦930 billion decline from Wednesday’s closing balance, reflecting the impact of Treasury bills settlement on available funds.
The market nevertheless remained in surplus despite the CBN’s aggressive liquidity sterilisation programme, which included ₦2.888 trillion in OMO bills sold earlier in the week.
Money market liquidity had stood at ₦4.61 trillion at midweek, supporting increased demand for Nigerian Treasury bills as banks increased their exposure to short-term investment instruments.
The movement in overnight rates indicates a modest tightening in short-term funding conditions, although the market continues to retain a substantial liquidity buffer.
Herwood Securities said the system is expected to receive ₦734.81 billion from matured Treasury bills, which should provide additional liquidity and ease pressure on short-term funding conditions.
What’s Being Said
“The financial system liquidity is expected to remain comfortable, supported by the ₦734.81 billion inflow from matured Treasury bills,” Herwood Securities Limited said in its market assessment.
Market expectations remain that the inflow will help limit further pressure on overnight funding costs, provided there are no significant additional liquidity debits.
What’s Next
- ₦734.81 billion in matured Treasury bills is expected to flow back into the financial system
- Banks and other market participants will monitor liquidity conditions for their impact on overnight funding costs
- OBB and overnight rates are expected to remain around current levels if system liquidity stays broadly comfortable
Bottom Line
The Bottom Line: The rise in the overnight rate signals modest tightening rather than a broad liquidity squeeze. With a sizeable surplus still available and Treasury bill maturities expected to inject ₦734.81 billion, short-term funding conditions are likely to remain relatively stable.
