Money‑market rates in Nigeria slipped on Wednesday as a sharp rise in banking‑system liquidity eased funding pressure. The Central Bank’s recent 350‑basis‑point cut to the policy rate, bringing it to 23 %, and a reduction of the Standing Deposit Facility floor to 20 % coincided with liquidity swelling to N7.45 trillion, a 7.92 % weekly gain. Overnight policy rates fell one percentage point to 21 % and the overnight lending rate dropped 51 basis points to 21.76 %.
The liquidity surge was driven mainly by a N2.27 trillion inflow from maturing Open Market Operation bills and higher use of the Standing Deposit Facility, which saw placements rise to N7.34 trillion. Banking liquidity has risen for four straight weeks, lifting the year‑to‑date total by 95.30 %. Investor appetite for short‑term government debt was evident at the mid‑week Treasury bill auction, where subscriptions topped N4.2 trillion while allotments remained under N500 billion.
ALSO READ | Odisha CM Suspends Transport Addl Secy, Jail Superintendent After 48‑Hour Custody
Interbank rates responded with broad declines: the overnight NIBOR fell 123 basis points to 20.93 %, the Open Repo rate slipped 100 basis points to 21 %, and Treasury‑bill yields dropped 43 basis points to 18.38 %. Analysts at AIICO Capital expect rates to edge closer to the 20 % Standing Deposit Facility floor as long as excess cash persists, while future Open Market Operations will be watched for their ability to drain surplus liquidity.
