Nigerian Banks Place N9trn at SDF Window, Rates Diverge
Nigerian deposit money banks (DMBs) placements at the Central Bank of Nigeria (CBN) Standing deposit Facility (SDF) window edged higher on midweek as the authority slowdown aggressive liquidity management action.
Aggeraget logements from commercial banks with excess cash surged to about N9 trillion in the SDF window as a results of boost from matured OMO bills inflow, and no primary market auction sales.
According to report, the money market short-term funding rates diverged on slight drop in excess liquidity in the financial system on Wednesday, Broadstreet firms said in separate update.
Hovering at the floor rate, Nigerian Overnight Financing Rate (NOFR) remained unchanged at 20% despite shift in money market liquidity temperature.
System liquidity fell 6.13% to ₦7.26 trillion from ₦7.74 trillion, according to AIICO Capital Limited. The firm also noted that about ₦2.02 trillion of primary market sales was took cash out of the system.
Market analysts stated that deposit money banks (DMBs) placed about ₦8.85 trillion at the CBN SDF window amidst tight lending appetite due to elevated default rate.
Banks were absence at the standing lending facility as the Apex Bank failed to conduct an open market operation that could strain surplus liquidity level in the banking system.
Hence, the Nigerian Interbank Borrowing rate (NIBOR) was steady at 20.21%, reflecting stable banking system liquidity.
Market analysts said short-term funding rates also diverged, as the Overnight (O/N) rate edged higher by 4bps to 20.34%, while the Open Repo (OPR) rate remained unchanged at 20.00%.
