Excess Liquidity in Banking System Surges Near N9trn
With a slight decline in the overnight lending rate, excess liquidity in the banking system increased to nearly N9 trillion as financial institutions continue to park funds at the Apex Bank Standing Deposit Facility (SDF).
The significant funding profile eased money market costs as rates diverged amidst the latest open market operation conducted by the Central Bank.
The financial system liquidity climbed by +8.38% to N8.87 trillion, Meristem Securities Limited reported, up from N8.18 trillion previously.
The investment firm said the improvement was driven by a +7.32% increase in standing deposit facility balances and a N225.13 billion surplus of repayment over new sales of instruments at the primary market.
Nigerian Interbank Offered Rates eased across most tenors on Thursday, with the overnight rate holding steady at 22.33%, signalling balanced system liquidity despite the CBN conducting a ₦600 billion OMO auction during the session.
Funding costs were mixed, as the Overnight rate slipped 2bps to 22.30% while the Open Repo rate held firm at 22.00%.
In the Treasury Bills secondary market, yields softened across all maturities, with the 1-month, 3-month, 6-month, and 12-month bills falling by 6bps, 4bps, 12bps, and 8bps, respectively, buoyed by the ₦400 billion NTBs auction conducted the previous day.
Overall, the average yield on Nigerian Treasury bills edged down 2bps to 17.82%, reflecting a modest uptick in investor demand even as caution persisted across the fixed-income space.

