Money market rates ease as system liquidity tops ₦4 trillion

By Boluwatife Oshadiya | October 13, 2026

Money market rates eased on Monday as banking system liquidity rose by 8.99% to approximately ₦4.04 trillion from ₦3.71 trillion, according to market data from AIICO Capital Limited.

The increase came ahead of ₦2.41 trillion in open market operations (OMO) bill maturities due on Tuesday, which market participants expect to provide an additional liquidity boost. Analysts are monitoring whether the Central Bank of Nigeria (CBN) will conduct an OMO auction to absorb excess funds from the financial system.

The overnight rate declined by 13 basis points to 20.72% from 20.85%, while the open repo rate fell by 40 basis points to 20.00% from 20.40%. The Nigerian Overnight Financing Rate (NOFR) remained unchanged at 20.00%.

The easing in rates coincided with stronger liquidity conditions, suggesting that immediate funding pressures in the interbank market had moderated during the reported session.

However, the outlook for money market rates will depend partly on the CBN’s response to the expected inflows. An OMO auction could withdraw some of the surplus funds, with the resulting liquidity position influencing interbank trading conditions.

Herwood Securities Limited said in its market commentary that the impact of the expected liquidity inflow would depend on the outcome of the anticipated OMO auction. The firm also indicated that interbank rates were expected to remain around prevailing levels as market participants assessed liquidity conditions and the auction outcome.

The developments place the central bank’s liquidity management operations at the centre of the near-term money market outlook. The available market update does not confirm whether the CBN has conducted or announced an OMO auction in response to the projected inflows.

Liquidity levels are an important determinant of short-term money market conditions. An increase in available banking system funds can ease immediate interbank funding pressures, while central bank operations can absorb excess liquidity and influence the direction of rates.

The expected ₦2.41 trillion OMO maturity is significant because the resulting funds could add to the surplus already recorded in the banking system. The extent to which that liquidity remains available to banks will depend on subsequent monetary operations and market conditions.

The decline in overnight and open repo rates indicates easing in those segments of the market, but the unchanged NOFR shows that the reported rates did not move uniformly. The available figures do not establish a sustained change in the broader monetary policy stance.

AIICO Capital Limited’s market data showed that system liquidity increased from ₦3.71 trillion to approximately ₦4.04 trillion on Monday, alongside declines in the overnight and open repo rates.

Herwood Securities Limited said the effect of the expected OMO maturity would depend on the outcome of the anticipated auction. The firm expects interbank rates to remain around current levels while participants monitor liquidity and the central bank’s operations.

The supplied market commentary does not contain a direct quotation from the CBN confirming its next move. The anticipated liquidity mop-up should therefore be treated as a market expectation, not a confirmed central bank decision.

The Bottom Line: The rise in system liquidity has eased pressure on key money market rates, but the direction of borrowing costs will depend on how much of the incoming cash remains in the banking system. The CBN’s next liquidity-management decision will be central to determining whether the current easing persists.

Save my name, email, and website in this browser for the next time I comment.

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.