Story: written by Zara October 31,2025
Nigeria’s interbank call rate has dropped to an 11-month low of 24.5 percent in October 2025, signaling improved liquidity conditions in the financial system as funding pressure on banks continues to ease. The decline follows the Central Bank of Nigeria (CBN)’s recent monetary policy adjustments, including gradual cuts to benchmark interest rates.

The interbank call rate—essentially the rate at which banks lend to one another for short periods—was last this low on November 4, 2024, when it stood at 19 percent. After reaching a high of 32.5 percent in March 2025, the rate began to moderate, falling from 26.5 percent in September to its current level.

According to Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., the recent drop is due to several factors, including reduced domestic borrowing by the federal government and the CBN’s adjustment of the Cash Reserve Ratio (CRR). He added that capital-raising activities by banks have strengthened their funding positions, lowering demand for short-term borrowing.

“These developments have eased pressure in the interbank market, leading to softer rates,” Olubunmi explained.

Ayodele Akinwunmi, Chief Economist at United Capital Plc, said the trend reflects broader economic improvements—slowing inflation, a more stable exchange rate, healthier external reserves, and renewed investor confidence. “We’re seeing a general moderation in interest rates across different market segments,” he said.

Tilewa Adebajo, CEO of CFG Advisory, noted that the trend confirms that the CBN’s monetary easing is filtering through the economy. “It shows that policy rate cuts are beginning to transmit effectively within the financial system,” he stated.

In September 2025, the CBN reduced the Monetary Policy Rate (MPR) by 50 basis points to 27 percent, as part of efforts to spur credit growth and support economic expansion. The CRR for commercial banks was also cut from 50 percent to 45 percent, while that for merchant banks remained at 16 percent. The apex bank, however, introduced a 75 percent CRR on non-TSA public deposits to mop up excess liquidity and maintain balance.

Data from the CBN also show a similar decline in the Open Buy Back (OBB) rate, which dropped to 26.5 percent in mid-October from a high of 32.58 percent earlier in the year. The OBB—used by banks to manage short-term liquidity through secured lending—hit its lowest level in a year at 24.25 percent in November 2024.

In its latest market report, Parthian Research revealed that system liquidity surged by ₦693.57 billion, with opening balances hitting ₦4.49 trillion. As a result, the overnight policy rate held steady at 24.5 percent, while the overnight lending rate edged down slightly to 24.84 percent.

Market analysts expect interbank rates to remain relatively stable in the short term, supported by improved liquidity conditions and the CBN’s cautious easing stance.