Overnight, Repo Rates Steady with Excess Liquidity in Money Market
Excess liquidity in the financial system kept repo and overnight lending rates unchanged amidst rising placements at the Central Bank of Nigeria (CBN) Standing Deposit Facility (SDF).
The money market was less aggressive in the absence of CBN open market operations, despite a robust funding profile. Last week, the authority mopped up about N4 trillion via its OMO bill sales, and there was also a Treasury bill auction.
Some analysts anticipate the authority will likely float its OMO bills for investor subscription, as liquidity levels in the financial system have advanced to near N4 trillion.
The projection is anchored on the expected inflow of ₦2.14 trillion from 27-Jan-26 OMO maturities.
Market data revealed that financial system liquidity closed at a net long position of ₦3.88 trillion compared to ₦2.78 trillion recorded at the close of last week.
This uptick was largely driven by DMBs’ lodgments to the CBN totaling ₦3.80 trillion, an increase of N1.14 trillion from the previous close. The market also recorded N21.61 billion inflow from bond coupon payments, enhancing the excess liquidity condition.
Consequently, funding rates, the overnight lending rate (O/N), and the open repo rate (OPR) remained firm at 22.79% and 22.50%, respectively.
The secondary market for NTB traded bullishly as the average benchmark yield declined by -3bps to close at 18.46%. This was driven by renewed demand for the long-dated bills.
Meanwhile, proceedings in the secondary market for the OMO market had a bearish undertone as average benchmark yield expanded marginally by +1bp to close at 22.16%. Zenith Bank Climbs as Investors Price in Acquisition Move
