Nigeria Interbank Rates Mixed as Banking Liquidity Hits N8.5trn
Nigeria interbank rates diverged amid a surge in excess liquidity in the financial system while banks increased placements at the Standing Deposit Facility (SDF) window.
The market expects rates to stay comfortable around current levels ahead of the Central Bank of Nigeria (CBN) liquidity management efforts, with OMO and Treasury bill auctions in focus.
The Nigerian money market maintained an elevated liquidity position last week, closing with a net surplus of N8.51 trillion, up from N7.37 trillion the previous week.
Liquidity peaked at N10.0trillion midweek, supported by about N2.02 trillion in OMO maturities, according to investment firm Cowry Asset Management Limited.
Market analysts said these inflows were partly offset by N2.95 trillion in OMO auction settlements and N509.40 billion in Treasury bill settlements. Consequently, the investment firm said placements at the CBN SDF remained substantial, with over N8.3 trillion deposited.
The overnight interbank rate fell 18 basis points (bps) to 20.20%, while the funding rate stayed unchanged at 20.00%. In the NIBOR market, rates generally edged higher across the one-, three-, and six-month tenors, up 2bps, 8bps, and 25bps, respectively, to 20.51%, 20.79%, and 21.16%.
However, the overnight NIBOR remained unchanged at 20.29%, according to Cowry Asset. The firm said this divergence suggests that while immediate funding conditions eased marginally, longer short-term tenors repriced in response to liquidity movements and prevailing market conditions.
Investor demand remained strong at the Nigerian Treasury bills auction held on 4 November 2026, with subscriptions reaching N2.04 trillion against an offer of N800 billion, representing a bid-to-cover ratio of 2.56x.
Demand was heavily concentrated in the 364-day instrument, which attracted N1.99 trillion, accounting for 97.5% of total bids. In contrast, the 91-day and 182-day bills attracted N25.01 billion and N25.83 billion, respectively, well below their N100 billion offers.
This preference for the longer tenor suggests investors were keen to lock in prevailing yields over a longer investment horizon. Despite strong demand, the CBN allotted N509.40 billion, below the total offer, for a sales-to-offer ratio of 0.64x.
The 364-day bill accounted for N461.84bn of the allotment, while the 91-day and 182-day instruments recorded sales of N22.40bn and N25.17bn, respectively. Stop rates declined marginally across all tenors to 15.40%, 15.79% and 15.80%.
Similarly, investor appetite for OMO bills remained robust at the CBN’s auction on 3 November 2026, with subscriptions of N3.52 trillion against an offer of N1.50 trillion, representing a bid-to-cover ratio of 2.35x.
Demand was concentrated in the 133-day instrument, which attracted N2.39 trillion, or 67.8% of total bids. The CBN allotted N2.95 trillion, 96.3% more than its initial offer, with the 133-day bill accounting for N2.36 trillion.
The 119-day and 126-day instruments recorded allotments of N339.82 billion and N247.31 billion, respectively. Stop rates settled at 17.77%, 17.71% and 17.67%.
Meanwhile, the CBN is likely to sustain its liquidity management operations through further OMO issuances and other sterilisation measures, particularly given the sizeable surplus funds in the banking system.
