(3 Minutes Read)
Interbank rates edged higher as foreign exchange interventions and Nigerian Treasury bill auctions led to a liquidity drain in the financial system. With minimal inflows last week, key money market indicators reacted negatively to the dip in liquidity.
The week began with a strong system liquidity surplus of ₦906.85 billion, thanks in part to maturing Treasury bills. However, this surplus shrank significantly by ₦603.81 billion, closing the week at ₦303.04 billion. This drop was driven by FX settlement outflows, NTB auction debits, and remittances into the Single Treasury Account, according to AIICO Capital Limited.
Despite the decline, liquidity remained in surplus territory, keeping interbank rates largely stable. The Overnight Policy Rate (OPR) rose marginally by 8 basis points to 26.58%, while the overnight lending rate increased by 10 basis points to 26.96%.
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The market maintained resilience, hovering around 27% funding rates, despite midweek pressures from CRR debits and FX interventions, which pushed liquidity to about ₦340 billion. Overall, average system liquidity remained positive, closing at a net long of ₦425.84 billion, down from ₦1.33 trillion the previous week, according to Cordros Capital Limited.
A ₦183.07 billion bond coupon inflow is expected to provide some relief in the coming days, potentially keeping funding rates stable.
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