Nigeria money market liquidity fluctuates amid OMO and Treasury bill settlements

Nigeria’s money market has experienced fluctuations in liquidity and funding costs driven by Open Market Operation (OMO) settlements and Treasury bill activities. While system liquidity has seen significant shifts—ranging from a surplus of approximately ₦3.57 trillion to peaks near ₦6.81 trillion—the banking system maintains a substantial liquidity buffer.

Liquidity levels were impacted by various factors, including ₦2.60 trillion in OMO settlements and ₦1.45 trillion in Treasury bills debits. In some sessions, liquidity expanded to roughly ₦4.93 trillion following a ₦2.22 trillion OMO repayment boost. Conversely, outflows related to Federal Government of Nigeria (FGN) bond allotments have also placed pressure on the system's credit balance.

Despite these movements, interbank funding rates have remained relatively stable or range-bound. The overnight lending rate has hovered around 22.2%, and the open repo rate has remained steady at 22.00%. Analysts suggest that while bond auction settlements may offset some liquidity injections, the overall funding conditions for deposit money banks remain comfortable due to the existing excess liquidity.