OMO Debit Drains Money Market Liquidity, Overnight Rate Dips
Financial system liquidity was slightly squeezed due to a large outflow related to the settlement of OMO bills sold by the Central Bank of Nigeria (CBN) to banks and foreign investors.
Market analysts said system liquidity settled at ₦3.84 trillion after successive OMO auctions tightened conditions, with the CBN removing N2.17 trillion for its auction settlement.
The CBN auctioned OMO bills on Monday and Tuesday to reduce excess liquidity in the market. The financial system was, however, bolstered by banks’ placements at the CBN standing deposit facility (SDF), with a daily increase of N2.61 trillion.
The fresh lodgment by banks with excess funds lifted total SDF balance to N3.65 trillion, according to AIICO Capital Limited, limiting the effects of recent auction settlement in the financial system.
Hence, the money market rates movement was kept in check in the absence of significant funding pressures and the absence of a midweek Treasury bills auction -despite maturing inflows.
At the close of the trading session, the Overnight Rate eased 2bps to 22.12%, with NOFR and OPR flat at 22.00%. AIICO Capital reported that there will be an inflow of ₦1.35 trillion from matured Treasury bills on Thursday. Nigeria’s Domestic Economy Expanded by 3.87% in 2025 – CBN
