Interbank Rates Cross 32% as Banks Ramp Up Borrowings

Interbank Rates Cross 32% as Banks Ramp Up Borrowings

Interbank rates surged sharply, trending above 32% apiece, the highest in the third quarter, as financial system liquidity switched to negative territory, tightened by deposit money banks’ activities at the standing lending facility window.

The money market rates have been fluctuating since the Central Bank of Nigeria (CBN) aggressively mopped up liquidity via open market operations that knocked off N2.12 trillion from the system. To meet their funding needs, banks have returned to the CBN standing lending facility to access cash needed to meet their operation demands. 

The system liquidity retreated to a N32.23 billion deficit, investment banking firms said in separate reports on Wednesday, despite zero Treasury bill auctions by the authority.

The liquidity position turned red after a N56.3 billion increase in the deposit money banks ’ borrowings from the standing lending facility window to N311.7 billion, AIICO Capital Limited said.

Hence, the short-term benchmark interest rates jerked up to the highest level in the third quarter of 2025. Data from the FMDQ platform revealed that the open repo rate increased by 240 basis points to close at 32.10% on Wednesday.

Also, the overnight lending rate edged higher by 310 basis points to close at 32.50% in the absence of significant inflows to support liquidity conditions in the money market. The short-term benchmark interest rates are expected to remain at a similar level, except for any significant inflow. #Interbank Rates Cross 32% as Banks Ramp Up Borrowings Naira Rises Against Dollar as External Reserves Hits $40.292bn