OMO Inflow Lifts Liquidity as Interbank Rates Drop Sharply

Samuel Mobolaji

System liquidity improved significantly on Wednesday following an ₦854.46 billion Open Market Operation (OMO) maturity, easing pressure on the Nigerian money market and driving a sharp decline in interbank rates.

According to data from the Central Bank of Nigeria (CBN), the financial system opened with a deficit of about ₦95 billion. However, the OMO inflow helped reduce the funding strain, even as banks continued to access the CBN’s standing lending facility to cover short-term obligations.

Interbank lending rates dropped across major maturities. The overnight rate fell by 2.96 per cent, while the 1-month, 3-month, and 6-month tenors declined by 1.25 per cent, 1.28 per cent, and 1.01 per cent, respectively, Cowry Asset Management Limited reported.

In the broader money market, rates showed a mixed trend. The Open Repo Rate (OPR) declined by 30 basis points to 32.10 per cent, while the overnight lending rate ticked up by 30 basis points to 32.40 per cent.

Treasury yields were also pressured lower. The Nigerian Interbank Treasury Bills True Yield curve dropped across most maturities, though secondary market sell-offs lifted the average yield slightly by 13 basis points to 18.12 per cent.

Analysts at AIICO Capital Limited noted that liquidity conditions are expected to remain broadly stable in the near term, with no major funding flows anticipated following the midweek OMO maturity.