Funding Costs Mixed as Banks’ Placements with CBN Increase
Money market funding costs were mixed, as Nigerian deposit money banks’ (BMBs) placements with the Central Bank increased by 2% as the financial system stayed liquid.
Market data showed lthe liquiditylevel climbed by 3% on the day in the absence of monetary action to reduce excess funding in the banking system.
On Thursday, the financial system liquidity saw an improved surplus balance, opening the day with ₦2.13 trillion. This is a marginal improvement from previous day’s open of ₦2.07 trillion, driven by continued banks placements at the CBN’s Standing Deposit Facility (SDF)
Money market reports obtained indicated that SDF placement surged to ₦2.03 trillion, and there was additional inflows from primary market repayment amounting to ₦341.64 million.
Investment firm reported that the Nigerian Interbank Offered Rates showed divergent trends across tenors on Thursday, with the overnight rate declining 66 bpsto 22.80%, indicating enhanced system liquidity.
Money market financing costs displayed mixed movements, with the Oovernightrate rising 77 bpsto 22.78%, whereas the Oopen reporate remained unchanged at 22.50%.
However, Treasury Bills secondary market yields dropped across maturities, with the 1-month, 3-month, 6-month, and 12- monthtenors falling by 11 bp, 9 bps, 12 bps, and 1 bp,respectively.
The average yield on Treasury bills rose 4bps to 18.22% in the secondary market, reflecting diminished investor sentiment in the secondary market. Naira Climbs to N1,419 Per Dollar as Foreign Reserves Surge

