Liquidity in Nigeria's financial markets hits N2.78 trillion
Liquidity in Nigeria's financial markets surged to an average net long position of ₦2.78 trillion as of Friday, January 23, 2026. This marks a 31.75% increase from ₦2.11 trillion recorded the previous week, according to analysts at Cowry Assets Management Limited. The spike is attributed to large maturity inflows and sustained investor activity, even as the Central Bank of Nigeria (CBN) intensified efforts to rein in excess funds from the banking system. Key drivers included about ₦2.2 trillion in Nigerian Treasury Bills (NTB) maturities, which outweighed liquidity debits from ₦1.06 trillion in NTB auction sales and ₦1.3 trillion in Open Market Operations (OMO) bill settlements. Despite the CBN withdrawing over ₦3 trillion through two separate auctions, maturity inflows kept system liquidity elevated. This development translates into tighter funding conditions, with the overnight NIBOR rising to 22.84% and funding rates staying high. The secondary market traded bearishly, with average yields up by 37 basis points to 18.50%. Investors showed strong demand for longer-dated instruments, with 98% of bids concentrated in the 364-day tenor. Looking ahead, analysts expect liquidity to remain positive next week, supported by about ₦900 billion in OMO maturities and anticipated FAAC inflows. However, upcoming FGN bond auctions on January 26 and repayments exceeding ₦900 billion could limit rate moderation. With funding rates likely to stay elevated, investors are positioning ahead of full-year 2025 earnings releases. How will you adjust your investment strategy amid these shifting liquidity dynamics and rising rates?