Banks Placements Boost System Liquidity by 13% to N7.65trn
Deposit Money Banks’ activities at the Central Bank of Nigeria (CBN) Standing Deposit Facility (SDF) window boosted financial system liquidity to N7.65 trillion in the absence of the OMO auction.
The market witnessed a drought of open market operations despite significant funds circulating in the financial system, raising the risk of inflation amid the latest slowdown in the consumer price index.
With the attractive double-digit SDF rate, commercial banks are aggressively choosing to park their excess funds with the CBN. This behaviour clearly reflects a diminished lending appetite in the industry, directly linked to rising borrower default rates.
Broadstreet firms report a compelling 12.82% expansion in financial system liquidity, now at N7.65 trillion, which is effectively stabilising money market rate movements.
Total placements at the CBN’s SDF reached N6.67 trillion on Tuesday, just prior to N1.05 trillion in Treasury bills sales set for Wednesday. Additionally, the market reported N785.75 billion in OMO repayments and N83.60 billion in primary market repayments.
FMDQ market data reveals that funding costs have diverged: the overnight rate improved by 2 basis points to 22.26%, while the open repo rate remains steady at 22.00%. This indicates a proactive shift in the financial landscape, reflecting market adjustments to current conditions. TikTok Boosts AI Media Literacy Spending in SSA with $200K
