Money Market Rates Mixed On 36% Banking System Liquidity Surge
Money market rates headed in different directions as financial system liquidity ended last week in surplus. Financial system liquidity conditions strengthened, up by 36. 0% to N4. 08 trillion from N3. 00. . .
Money market rates headed in different directions as financial system liquidity ended last week in surplus. Financial system liquidity conditions strengthened, up by 36. 0% to N4. 08 trillion from N3. 00 trillion in the previous week, according to Cowry Asset Limited. The short-term benchmark interest movement was capped by excess liquidity, which has persisted despite open market operations auctions floated by the Apex Bank. Some banks increased bets at the Central Bank OMO bills auction with an average spot rate of 20% offered to market participants, a pricing adopted to attract and lock foreign investors in the economy. Market analysts said the improvement was driven primarily by N2. 45 trillion in primary market repayments and stronger placements of about N2. 60 trillion at the Standing Deposit Facility (SDF), which lifted the opening net surplus balance to over N5. 00 trillion. Despite the significant increase in liquidity, funding conditions remained relatively stable, reflecting the Central Bank of Nigeria’s (CBN) continued liquidity management strategy and balanced market conditions. Money market funding rates eased marginally during the review period, according to separate Broadstreet investment firms’ investor notes. The Open Repo Rate (OPR) remained unchanged at 22. 00%, while the Overnight (OVN) rate declined by 4 basis points to 22. 10%, reflecting improved liquidity in the banking system. Similarly, the Nigerian Interbank Offered Rate (NIBOR) curve moderated across all maturities. The decline in interbank funding rates underscores the impact of stronger system liquidity and reduced short-term funding pressures, even as the CBN maintains its restrictive monetary policy stance. Interbank funding rates are expected to remain range-bound in the near term, supported by current system liquidity levels. The financial market will welcome OMO bills and midweek Treasury bills auctions, which are anticipated to remove excess liquidity. Nigeria’s Domestic Economy Expanded by 3. 87% in 2025 – CBNJulius AlagbeJulius Alagbe is a senior financial journalist and Editor at MarketForces Africa with nearly two decades of experience in finance, accounting, and economics reporting. He is one of Nigeria's most prolific financial market reporters, covering capital markets, monetary policy, corporate earnings, banking, telecoms, and macroeconomic developments across Africa. Julius has built a strong footprint reporting on Nigeria's leading corporates and financial services sector, including coverage of the Nigerian Exchange Group, Central Bank of Nigeria monetary operations, MTN Nigeria, GTCO, and major investment banking transactions. He regularly monitors the CBN’s open market operations, interbank FX markets, and equity market movements, providing readers with real-time intelligence on Nigeria’s financial landscape. His reporting draws on direct access to institutional research from firms including Moody’s Ratings, CardinalStone Securities, Fitch, and other leading African investment houses. Julius brings analytical depth and editorial rigour to every story, making complex financial data accessible to professionals, investors, and policymakers across Africa. Julius Alagbe is based in Lagos, Nigeria.