NOFR Steadies at 22% Amidst Financial System Liquidity Swings
The Nigerian overnight financing rate (NOFR) was steadied at 22% amid fluctuations in banking system liquidity, market analysts said in a separate report.
Reflecting prevailing liquidity conditions, Nigeria’s overnight risk-free reference rate has been fluctuating between 20.50% and 22% during the week, reflecting the cost of secured overnight Naira funding among eligible financial institutions.
The financial system liquidity opened with a surplus of ₦5.69 trillion on Thursday, down ₦519.93 billion from the previous open of N6.21 trillion, according to AIICO Capital Limited.
The reduction was driven by the settlement of N829.33 billion for Nigerian Treasury bills auction held midweek, which outweighed inflows of ₦634.47 billion from the maturity of the 21 May 2026 bill.
Nonetheless, liquidity levels remained robust, with banks maintaining strong placements at the Central Bank Standing Deposit Facility (SDF) window, totalling N5.80 trillion.
Meanwhile, some financial institutions with liquidity shortages accessed N221 million through the Standing Lending Facility (SLF), AIICO Capital said in its note.
NOFR, the market-based rate for interbank liquidity, remained steady at 22.00%, with a daily variation of 10% as of 20-May-2026.
Cowry Asset Management Limited noted that money market funding costs were divergent, as the Overnight rate edged up 4 bps to 22.18%, while the Open Repo rate remained unchanged at 22.00%.
In the Treasury Bills secondary market, yields closed on a mixed note, with the 3-month and 12-month bills rising 11bps and 10bps respectively, while the 1-month tenor bucked the trend with a 19bps decline and the 6-month tenor held steady.
Overall, the average T-Bills yield dipped by 3 bps to 17.46%, reflecting increased investor demand and a broadly positive tone across the fixed-income space.
Barring any significant shocks, analysts expect system liquidity to ease in the next trading session as the settlement of the CBN’s OMO auction is likely to tighten liquidity conditions. Naira Rebounds to N1,372 as Interbank FX Turnover Rises
