NTB Settlement Drags Banking System liquidity, Rates Mixed
Money market rates moved in mixed directions as liquidity level in the financial system declined following the debit for Nigerian Treasury bills (NTB) allotment to investors at the midweek auction.
Market data obtained from an investment banking firm indicated that liquidity balance in the banking system moderated to an estimated net long position of ₦1.88 trillion.
The amount represented a sharp reduction from ₦3.02 trillion recorded the prior day, a decline attributed to debits from the latest NTB auction totaling ₦1.91 trillion.
The financial system recorded an outflow for the auction sales, which outweighed inflows from an expired Treasury bill paper totaling ₦765.88 billion.
Consequently, the overnight funding rate (O/N) expanded by +3bps to close at 22.86%, while the open repo rate (OPR) remained firm at 22.50% respectively.
Elsewhere, the secondary market for NTB closed bullish as unmet demand at the latest auction filtered in. Average benchmark yield declined by -18bps to close at 17.33%.
Similarly, the secondary market for OMO closed with a bullish tilt as the average benchmark yield declined by -1bp to close at 20.55%
Nigerian Interbank Offered Rates exhibited mixed performance on Thursday, with the overnight rate climbing 7bps to 22.84%, indicating tighter system liquidity.
Similarly, the 3-month maturity increased 8bps, while the 6-month tenor declined 3bps and the 1-month tenor stayed flat, according to Cowry Asset Limited. Naira Drops Further as Foreign Payments Surge
