The Nigerian money market last week saw liquidity in full flow, buoyed by maturing OMO and Treasury bills worth N250 billion and N230.66 billion respectively.
The market opened the week on a strong footing with a robust system balance of N5.12 trillion but gradually tapered off, closing at N3.39 trillion as liquidity management operations kicked in.
To tame the excess cash in circulation, the Central Bank of Nigeria (CBN) conducted aggressive OMO auctions early in the week, followed by a round of Treasury bills auctions.
Banks, however, remained largely passive on the lending front, redirecting surplus funds into the CBN’s Standing Deposit Facility (SDF) window. Liquidity was further thinned by N154.75 million in primary market repayments and additional debits amounting to N55.24 billion.
Despite the fluctuations, short-term rates moved modestly lower as abundant liquidity kept funding pressures subdued.
The Overnight NIBOR eased by 2bps week-on week to 24.86 per cent, while the 1-month and 3-month tenors each slipped by a basis point.
The 6-month rate saw a sharper 18bps decline. Interbank rates, however, remained broadly stable, overnight rate edged slightly up by 8bps to 24.97 per cent, while the funding rate was flat at 24.50 per cent.
In the secondary Treasury bills market, sentiment was bullish throughout the week as investors repositioned amid sustained naira stability and improving market fundamentals. Renewed demand—especially across short and mid-tenor bills—drove average yields down by 55bps week-on-week to 17.40 per cent.
At the OMO auction, the apex bank offered N600 billion worth of bills but met an overwhelming demand of N4.4 trillion. Eventually, N3.0 trillion was allotted, with stop rates printing at 19.45% for the 168- day paper and 19.49% for the 196-day paper, signalling a cautious tightening stance despite market liquidity.
Meanwhile, the NTB auction held on October 8, 2025, drew another wave of strong investor appetite, especially at the long end of the curve. Total subscription soared to N1.06 trillion against a N570 billion offer, underscoring the dominance of short-term liquidity players seeking decent returns in a stable macro environment.
The 364-day paper absorbed most of the inflows, attracting N986.33 billion in bids, nearly double the total offer—and clearing at a stop rate of 15.77 per cent, a mild compression from previous levels. Shorter tenors saw subdued interest. The 91- day bill received N25.97 billion in subscriptions, clearing at 15.00%, while the 182-day paper garnered N52.12 billion, clearing at 15.25n per cent.
In the coming week, we expect liquidity levels to remain robust and positive and to be driven by continued activities of banks at the SDF window as well as the N300 billion OMO maturity which is expected to hit the system in the new week.
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