Money Market Rates Diverge as System Liquidity Fluctuates
The money market rates diverged as the open repo rate declined by 8 basis points to settle at 26.42%, whilst the overnight lending rate inched up by 4 bps to reach 26.96% on Wednesday.
The financial system liquidity reduced to ₦1.48 trillion from ₦1.52 trillion in the previous session. Market analysts notice that the absence of funding pressure has eased local banks’ borrowing from the Central Bank.
Nigerian banks’ placements into the standing deposit facility of the Apex Bank, however, declined by 4% to ₦1.70 trillion yesterday—reflecting fluctuating liquidity conditions.
With no major outflows on the horizon, system liquidity is expected to remain in surplus over the near term. On Wednesday, the Nigerian Interbank Borrowing Rate (NIBOR) displayed mixed performance, Cowry Asset Limited reported.
The overnight rate declined marginally by 2 basis points to 26.79%, driven by improved system liquidity from the ₦600 billion OMO Bills maturity this week.
The Central Bank of Nigeria (CBN) has left the robust funding profile without any open market operation action, and the Apex Bank did not float the Treasury bills auction.
Money market rates reflected varied dynamics, with the overnight rate rising by 4 basis points to 26.96%, while the Open Repo Rate (OPR) decreased by 8 basis points to 26.42%.
Likewise, the Nigerian Interbank Treasury Bills True Yield showed diverse performance, with yields on the 1-month, 3-month, and 6-month tenors increasing by 16, 16, and 12 basis points, respectively, while the 12-month tenor fell by 14 basis points.
The average yield for Nigerian Treasury bills rose by 3 basis points to 18.79%, signaling persistent weak and negative investor sentiment in the secondary market. #Money Market Rates Diverge as System Liquidity Fluctuates CBN to Open Treasury Bills Worth N480bln for Subscription