Excess liquidity in Nigeria’s money market surged to around ₦6.6 trillion as the Central Bank of Nigeria (CBN) stayed out of market operations, despite a wave of additional inflows from matured instruments.
The CBN’s absence allowed liquidity to flow freely, with deposit money banks (DMBs) increasing placements at the CBN’s Standing Deposit Facility (SDF). Following a recent interest rate adjustment, the central bank refunded some banks for excess cash reserve ratios, further supporting liquidity growth.
Interbank rates trended lower, falling below 35%, reflecting both the size of liquidity in the banking system and the adjustment to the monetary policy rate asymmetric ratio. Until the next monetary policy committee meeting, banks can borrow from the CBN at 29.50%, following a 50-basis-point rate cut. Meanwhile, banks will earn 24.5% on deposits placed with the apex bank, a rate currently higher than the average yield on one-year Treasury bills.
The surplus liquidity has helped keep funding costs in the money market relatively low. On Tuesday, market liquidity rose to ₦6.57 trillion following an inflow of ₦731.14 billion from the 30 September 2025 OMO maturity and increased DMB deposits with the CBN, according to AIICO Capital Limited.
Banks placed a total of ₦5.54 trillion with the CBN at the SDF rate of 24.5%. Updates from the FMDQ platform showed that the Open Repo Rate (OPR) remained steady at 24.50%, while the Overnight Rate (OVN) fell by eight basis points to close at 24.92%.
AIICO Capital Limited noted that interbank rates are expected to remain stable unless the CBN resumes open market operations.
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