Money Market Funding Rates Ease Ahead of NGOMOB Inflow
Money market funding rates eased ahead of anticipated inflows of more than N2 trillion from NGOMOB, a financial market ticker prefix used for Open Market Operations (OMO) zero-coupon bills and short-term securities issued by the Central Bank.
Nigerian Interbank Offered Rates opened the week on Monday with a mixed performance, as the overnight rate edged down 2 bps to 22.19% despite tight liquidity conditions in the system.
Money market indicators followed the direction of credit balance in the financial system, opening the week in surplus at ₦3.57 trillion.
The hefty liquidity condition was supported by Deposit Money Banks’ (DMBs) participation at the Central Bank of Nigeria’s (CBN) Standing Deposit Facility (SDF), according to AIICO Capital Limited.
At the SDF window, total banks’ lodgments or placements settled at ₦3.63 trillion with no recourse to the Standing Lending Facility (SLF).
Consequently, average money market funding rates eased, with the Overnight Rate (OVN) declining by 6bps to 22.19%, while the Overnight Policy Rate (OPR) remained unchanged at 22.00%.
AIICO Capital Limited anticipates system liquidity to improve further following the inflow of approximately ₦2.22 trillion from the NGOMOB 18 August 2026 maturity, which should support market liquidity and moderate short-term funding pressures.
In the Treasury Bills secondary market, yields trended upward across all tenors, with the 1-month, 3-month, 6-month, and 12-month papers expanding by 51bps, 6bps, 3bps, and 3bps, respectively.
Traders said thin trading volumes contributed to the rise, lifting the average Nigerian Treasury Bills yield by 8 bps to 18.62%, reflecting a predominantly bearish market sentiment.
Last week, system liquidity opened at N4.08 trillion and climbed to N6.47 trillion by midweek, buoyed by an OMO maturity of N2.48 trillion.
However, this position was reduced to N3.57 trillion through the Nigerian Treasury Bills auction, with N1.46 trillion allotted and N2.60 trillion sold in an OMO auction.
A further net inflow of approximately N1.16 trillion is most plausibly from SDF repayment timing and/or FAAC, according to Coronation Merchant Bank’s research subsidiary. The OPR held steady at 22.00%, while the Overnight Rate (OVN) edged 15bps higher to 22.25%.
