Money Market Rates Dip as Financial System Liquidity Tops N4trn
Money market rates eased as net surplus liquidity in the financial system increased by about 9%, reflecting the absence of funding pressures on Monday.
The liquidity conditions in the financial system closed strong ahead of large inflows from OMO bill repayments, which are expected to bolster liquidity levels.
At the same time, market analysts said they expect the Central Bank of Nigeria (CBN) to conduct an open market operation to mop up excess liquidity.
According to analysts, surplus liquidity in the banking system will expand without an OMO bill, with additional inflows anticipated. Market reports revealed that ₦2.41 trillion OMO maturity is due on Tuesday.
The impact on liquidity will depend on the outcome of the anticipated OMO auction, Herwood Securities Limited said in its commentary note.
The banking system recorded an 8.99% increase in liquidity on Monday, settling at about ₦4.04 trillion from ₦3.71 trillion, AIICO Capital Limited market data confirmed.
The Overnight rate eased 13 basis points to 20.72% from 20.85%, and the Open Repo rate fell 40 basis points to 20.00% from 20.40%. Nigerian Overnight Financing Rate (NOFR) was unchanged at 20.00%.
Interbank rates are expected to remain within current levels, with market participants closely monitoring liquidity conditions and the auction outcome, Herwood Securities Limited said in its note. Nigerian Naira Softens Against US Dollar, Euro, British Pound

