Money Market Rates Rise as Financial System Liquidity Shrinks
Money market rates surged as liquidity in the financial system tightened following the settlement of midweek treasury bill allotments to investors.
The short-term benchmark rates increased following a significant outflow from the Central Bank of Nigeria (CBN) open market operations, which had drawn substantial investor subscriptions.
System liquidity fell 9.30% to about N3.59 trillion from N3.96 trillion, as the Nigerian Treasury Bills auction drew cash out. The average T-bill rate and the Nigerian Overnight Financing Rate (NOFR) were flat at 17.85% and 20.00%, respectively.
The Nigerian Interbank Offered Rate (NIBOR) ended Thursday’s session on a mixed note, with the overnight rate rising by 12bps to 20.36%, reflecting relatively tight liquidity conditions across the banking system.
In the Treasury Bills secondary market, yields predominantly trended lower across the shorter maturities. Overall, cautious market participation and measured investor demand supported a relatively stable trading environment, leaving the average T-Bills yield unchanged at 17.85%.
