Banking System Liquidity Rises 33% on OMO Bills Repayment
Excess liquidity in the Nigerian financial system surged about 33% after heavy OMO bill repayments and the Central Bank’s absence from open market operations.
The surplus liquidity reduced the money market short-term benchmark interest rate, keeping the Nigerian Overnight Financing Rate (NOFR) at 20%.
Excess credit in the finance system rose 32.45% to ₦7.74 trillion from ₦5.84 trillion, helping to keep money market rate movements in check.
The significant surge posted on Tuesday was supported by about ₦2.07 trillion from the 20 October OMO maturity. Nigerian banks’ placements at the Central Bank’s standing deposit facility reached ₦5.46 trillion, according to AIICO Capital Limited.
The investment firm confirmed zero activity at the Standing Lending Facility (SFL), reflecting no funding pressure. Market analysts noted that the Nigerian money market closed Tuesday’s session mixed, as the overnight NIBOR fell 4bps to 20.21%.
Similarly, short-term funding rates moved in opposite directions, with the Overnight (O/N) rate easing by 14bps to 20.30%, while the Open Repo (OPR) rate remained unchanged at 20.00%.
The market anticipates surplus funds to decline following N1.21 trillion in October FGN bond settlement. Investment firms also expect the Apex Bank to float an OMO bill auction to reduce excess cash in the money market. DMO to Open N1.75trn Nigerian Govt. Bonds for Subscription

