Overnight Rate Dips On Excess Banking System Liquidity
The overnight lending rate has decreased by 2 basis points as excess liquidity in the financial system continues to ease interbank borrowing pressures. The financial system remains sufficiently liquid, thanks. . .
The overnight lending rate has decreased by 2 basis points as excess liquidity in the financial system continues to ease interbank borrowing pressures. The financial system remains sufficiently liquid, thanks to repayments from expired short-term instruments and the lack of significant outflows related to the Open Market Operations (OMO) auction. The Central Bank of Nigeria (CBN) has taken a less aggressive approach to liquidity management this week, even with inflows from matured OMO bills and Treasury bills entering the money market. Market liquidity started the day with a credit balance of ₦3. 86 trillion, an increase of ₦632. 81 billion from Wednesday’s close, bolstered by ₦378. 43 billion from Treasury bill maturities, Herwood Capital Limited disclosed in a note. With over ₦29 billion in primary market repayments, the interbank market ended positively on Thursday, leading to a decrease in the overnight Nigerian Interbank Offer Rate (NIBOR) by 4 basis points to 22. 24%. In a note, Cowry Asset Limited said longer-dated tenors also declined, with 1-month, 3-month, and 6-month rates dropping by 16 basis points, 31 basis points, and 0. 1 basis point, respectively. As a result, money market funding costs varied: the overnight lending rate fell by 2 basis points to 22. 21%, while the Open Repo rate remained unchanged at 22. 00%. Due to strong trading activity and robust investor interest, the average yield on Nigerian Treasury bills also decreased by 4 basis points to 18. 13%. Financial analysts said they expect Interbank funding rates to remain range-bound in the near term, supported by current system liquidity levels. #Overnight Rate Dips on Excess Banking System LiquidityMoney Market Liquidity Dips as CBN Debits Banks for CRROlu AnisereOlu Anisere is a financial and economic journalist at MarketForces Africa, specialising in African macroeconomic policy, international finance, energy markets, and continental development. He covers major multilateral institutions, including the International Monetary Fund (IMF), World Bank, and the United Nations Economic Commission for Africa (ECA), providing readers with frontline reporting on policies shaping Africa's economic trajectory. Olu has reported extensively on Nigeria's fiscal and monetary policy landscape, including CBN interest rate decisions, Nigeria's bond market, FX inflows, and the country's engagement with global financial institutions. His coverage spans IMF and World Bank Spring and Annual Meetings, African Ministers of Finance conferences, and high-level economic forums where Africa's development agenda is set. His reporting captures perspectives from Africa's most influential economic voices, including Tony Elumelu, senior IMF officials, and CBN leadership, bringing institutional insight and policy depth to MarketForces Africa's readers. Olu also covers Inside Africa — tracking economic, investment, and development stories from across the continent. Olu Anisere is based in Lagos, Nigeria.