Nigeria's Banking Liquidity Jumps 33% After OMO Repayments

The liquidity in Nigeria's financial system surged by approximately 33% due to substantial repayments of Open Market Operations (OMO) bills and the Central Bank's absence from open market operations. This increase in surplus liquidity resulted in the Nigerian Overnight Financing Rate (NOFR) remaining at 20%.

Excess credit in the financial system rose by 32.45% to N7.74 trillion from N5.84 trillion, which helped stabilize money market rate movements. The significant liquidity surge was supported by around N2.07 trillion from the OMO maturity on 20 October.

Nigerian banks' placements at the Central Bank's standing deposit facility reached N5.46 trillion, with no activity recorded at the Standing Lending Facility, indicating no funding pressure. Market analysts observed that the Nigerian money market closed with mixed results, as the overnight NIBOR decreased by 4 basis points to 20.21%.

The Overnight (O/N) rate eased by 14 basis points to 20.30%, while the Open Repo (OPR) rate remained unchanged at 20.00%. Expectations are that surplus funds will decline following N1.21 trillion in October FGN bond settlement.