Money Market Liquidity Tops N6trn Ahead of OMO Inflow
Money market liquidity topped N6 trillion at the close of the trading session last week despite a substantial rise from the open market operation conducted by the Apex Bank.
The financial system is anticipated to be flooded with free funds seeking placement and short-term investment bets due to fresh inflows from matured bills.
In its market report, Cowry Asset Management Limited said liquidity conditions are expected to remain significantly robust as the market enters a new month with a heavy maturity profile.
According to the investment firm, scheduled inflows include approximately ₦2.72 trillion in OMO maturities, one of the largest single-week injections seen in recent periods.
The market anticipates additional inflows of ₦631.46 billion in Nigerian Treasury bills maturities, bringing total expected inflows to about ₦3.35 trillion.
This is expected to comfortably offset the planned ₦700 billion T-Bills auction scheduled for Wednesday, likely sustaining bullish sentiment across the fixed income market in the near term.
Financial system liquidity opened at ₦3.84 trillion last week, rebounding from the previous Friday’s post-OMO auction low of ₦2.79 trillion.
Liquidity levels strengthened further, eventually closing at ₦6.02 trillion on Friday, driven largely by increased placements at the Central Bank’s Standing Deposit Facility (SDF) amid subdued interbank borrowing and weaker funding pressures among banks.
The major catalyst came after an inflow of ₦1.97 trillion in OMO maturities within the week, which pushed system liquidity sharply higher to ₦5.92 trillion.
Despite the significant liquidity injection, interbank funding rates remained largely stable, with both the Open Repo (OPR) and Overnight (O/N) rates unchanged at 22.00% and 22.19%, respectively, across the week, reflecting already comfortable liquidity conditions in the financial system.
Across the benchmark money market indicators, Cowry Asset Limited said the Nigerian Interbank Offered Rate (NIBOR) showed mixed but generally downward movements across longer tenors, indicating improved short-term funding conditions.
Overnight NIBOR remained flat at 22.25%, while the 1-month, 3-month, and 6-month tenors declined by 17bps, 70bps, and 88bps respectively to settle at 22.65%, 22.97%, and 23.28%.
Meanwhile, activity in the secondary treasury bills market remained moderately active despite the shortened trading week. Sentiment tilted bullish as investors continued to position aggressively on the back of elevated system liquidity, driving average benchmark yields lower by 6bps week-on-week to close at 17.51%.
The OMO auction results for May 29, 2026 indicate exceptionally strong investor demand for liquidity, particularly for the 102-day tenor, which recorded subscriptions of ₦1.73 trillion against an offer size of ₦200 billion.
The Central Bank eventually sold ₦1.72 trillion at a stop rate of 20.37%, highlighting aggressive market participation despite slightly lower yields than shorter-tenor instruments.
The 11-day paper also attracted healthy demand with subscriptions of ₦225 billion and total sales of ₦220 billion at a stop rate of 21.80%, reflecting investors’ preference for short-duration instruments amid prevailing uncertainty around rates and liquidity conditions.
Meanwhile, the 39-day tenor, despite receiving ₦588 billion in subscriptions, recorded “No Sale,” suggesting the CBN rejected bids likely due to pricing considerations and an attempt to avoid validating lower yield expectations. Economic Reforms Yet to Fully Impact Businesses, Says NECA
