Overnight Rate Steadies, Money Market Liquidity Reduces
The short-term benchmark rates were steady in the money market, as liquidity conditions in the financial system remained surplus following a series of open-market operations.
Again, the sustained excess funding in the financial system kept the Nigerian Overnight Financing Rate (NOFR) at 22%, analysts said.
The Apex Bank has continued to monitor the financial system’s funding profile and has acted promptly by selling OMO bills to reduce free funds through short-term debt instruments.
The financial system liquidity remained strong on Wednesday, with a moderately surplus balance of N5.32 trillion, though down N5.36 billion from the previous open of N5.33 trillion.
The liquidity level was largely supported by ₦5.09 trillion placed at the Central Bank of Nigeria (CBN) Standing Deposit Facility (SDF) to earn above the treasury bill rate on free funds.
The market also recorded additional inflow from Primary Market Repayment totalling ₦271.13 million, with no recourse to the standing lending facility (SLF) window.
Borrowing activities have reduced sharply on the back of well-liquid money market conditions. However, the Nigerian Overnight Financing Rate (NOFR) remained steady at 22.00% as of 12 May 2026, according to AIICO Capital Limited.
Nigerian Interbank Offered Rates closed on a mixed note on Wednesday, with the overnight rate easing 10bps to 22.25%, reflecting improved system liquidity as the Standing Deposit Facility advanced to about ₦5.1 trillion.
The market report shows that funding costs were similarly divergent, as the Overnight rate fell 5bps to 22.16% while the Open Repo rate remained unchanged at 22.00%. Barring any significant liquidity shocks, analysts at the investment firm expect funding rates to remain moderate in the term.
In the Treasury Bills secondary market, yields closed on a varied note, with the 1-month, 3-month, and 6-month bills rising 73bps, 49bps, and 34bps, respectively, while the 12-month tenor bucked the trend with a 7bps decline.
Overall, the average Nigerian Treasury Bills yield edged up 3bps to close at 17.47%, reflecting softening investor demand and a broadly negative tone across the fixed-income space Citi Outlines Pathway to Stronger, Durable Returns at Investor Day
