Banks Boost Financial System Liquidity Ahead of OMO Debit
Banks’ placement at the Central Bank of Nigeria (CBN) Standing Lending Facility (SLF) buoyed liquidity in the financial system ahead of the settlement of OMO bills at auction.
System liquidity increased by 13% to ₦3.53 trillion, a slew of analysts across the Broadstreet said in their respective market updates, reflecting an increase of ₦416.00 billion from the previous session.
The surplus liquidity in the money market kept interbank rate movements in check, as banks did not borrow at the standing lending facility.
A surge in financial system liquidity was helped by placement at the CBN’s Standard Deposit Facility (SDF) window, which reached ₦3.97 trillion, despite the settlement of ₦524.27 billion from the February 2026 bond primary market auction.
The overnight funding rate (O/N) declined by 10bps to close at 22.15%, down from 22.68% previously. Meanwhile, the Open Repo rate (OPR) remained firm at 22.50%.
Meanwhile, the CBN offered ₦600 billion through an OMO auction across the 6-, 104-, and 167-day tenors, but allotted ₦1.11 trillion across the three tenors.
The market will be debited for the amount on Thursday, which is expected to strain liquidity in the financial system in the absence of additional inflows from other sources.
The secondary market for NTB closed bearish, with the average benchmark yield rising by 13bps to 17.17%. Conversely, average benchmark yield declined by -63bps to close at 19.50% in the OMO market, as unmet demand at the auction filtered in.
Barring any significant outflow, analysts expect system liquidity to remain robust in the interim. GTCO Climbs to N4.3trn Ahead of 2025 Earnings
