Money market liquidity rises to ₦7.37tn as rates hold

By Boluwatife Oshadiya | November 2, 2026

Excess liquidity in Nigeria’s financial system rose to ₦7.37 trillion from ₦6.94 trillion the previous week, as money market rates remained broadly stable amid limited liquidity mop-up operations by the Central Bank of Nigeria (CBN).

Investment firm Cowry Asset Limited reported that Open Market Operations (OMO) maturities largely supported the liquidity surplus, despite a ₦71.16 billion settlement for the Nigerian Treasury bills auction conducted during the week.

The overnight rate edged up by two basis points to 20.36%, while the funding rate remained unchanged at 20.00%, according to the market update. Cowry attributed the subdued movement in funding costs, despite the larger liquidity surplus, to banks’ preference for holding excess cash and placing funds with the CBN.

In the interbank market, the Nigerian Interbank Offered Rate (NIBOR) declined across the one-, three- and six-month tenors. The rates fell by 23, 38 and 63 basis points to 20.49%, 20.71% and 20.91%, respectively.

The CBN also offered ₦1 trillion across 124-day and 138-day OMO instruments at its latest reported auction. Subscriptions reached ₦2.28 trillion, representing a bid-to-cover ratio of 2.28 times the amount offered.

However, the Bank allotted only ₦244.94 billion, equivalent to a sales-to-offer ratio of 0.24 times. The stop rates settled at 17.69% and 17.63% for the two instruments, respectively.

The strong subscription level indicates investor demand for short-term, high-yielding instruments, while the relatively low allotment suggests the CBN maintained a selective approach to absorbing excess liquidity.

Cowry Asset Limited said the increase in excess liquidity, alongside relatively stable funding costs, reflected banks’ preference for retaining surplus cash and placing funds with the CBN, limiting activity in the interbank market.

The firm’s update also linked the liquidity surplus largely to OMO maturities. However, the supplied material does not contain a direct quotation from Cowry Asset Limited or a separate response from the CBN or an independent market analyst.

The liquidity surplus is substantial, but its limited transmission into lower overnight funding costs suggests that excess cash is not automatically translating into more active interbank lending. The CBN’s OMO allotment decisions will remain central to how quickly that surplus affects short-term market rates.

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