Overnight Rate Drops as Financial System Liquidity Rises to N5.33trn
The overnight lending rate dropped slightly as financial system liquidity conditions improved ahead of settlement for OMO bills allotment, with the short-term benchmark interest rates declining slightly.
Opening liquidity rose 5.46% to N5.33 trillion from N5.05 trillion as market analysts anticipate financial system conditions to remain flooded with higher credit balances in the absence of Central Bank auctions.
Money market, however, witnessed a huge drop in placements by deposit money banks at the standing deposit facility. Specifically, SDF placements dropped from ₦4.62 trillion to ₦2.61 trillion following earlier OMO bill sales to investors, which were settled on Tuesday.
24 hours after the first open market operation, the CBN floated another auction where it offered ₦600 billion worth of OMO bills but allotted ₦ 2.17 trillion at stop rates of 20.35% and 20.15%.
With the surplus liquidity level, the Nigeria overnight financing rate (NOFR) remained stable at 22.20%, while the Overnight rate (O/N) declined by 1bps to 22.14%.
The Nigerian Interbank Offered Rates (NIBOR) closed unchanged on Tuesday, Cowry Asset Limited said with the overnight, 1-month, 3-month, and 6-month tenors remaining steady at 22.21%, 22.64%, 23.22%, and 23.59%, respectively.
In the Treasury Bills secondary market, yields were mixed across the curve. The 1-month, 3-month, and 12-month bills declined marginally by 1bp, 1bp, and 10bps, respectively, while the 6-month bill rose by 3bps.
Overall, mild investor demand kept the average T-Bill yield unchanged at 18.15%. Overnight Rate Dips as Financial System Liquidity Rises to N5.33trn Interbank Rates Diverge as Financial System Liquidity Declines

