Nigeria’s Interbank Market Rates Declines Slightly After February Peak

Nigeria’s interbank market experienced significant volatility in early 2025; however, recent data from the Central Bank of Nigeria (CBN) shows a modest decline in short-term rates since March, indicating easing liquidity pressures.

The Open Buy Back (OBB) rate peaked at 32.58% in February, reflecting tight system liquidity and aggressive mop-up operations by the CBN. In January, the OBB rate ranged between 26.50% and 33.00%, with a weighted average of 32.50%, underscoring severe liquidity constraints. By March, conditions began to ease slightly, with OBB rates falling between 26.50% and 36.50%.

This softening persisted into April, as rates fluctuated between 27.32% and 32.50%, indicating a gradual reduction in pressure. Call rates mirrored this trend. After staying above 31.00% in both January and February, call rates declined in March, reaching lows of 26.50%, and averaged around the same 26.50% in April, reinforcing signs of improved interbank liquidity.

This decline in rates is largely attributed to increased fiscal disbursements, maturing government securities, and more measured liquidity management by the CBN. However, despite recent improvements, short-term rates remain elevated compared to pre-2024 levels, suggesting that interbank market conditions are yet to fully normalise. Further moderation will depend on sustained liquidity injections and favourable macroeconomic shifts.