Interbank Rates Ease on Tight Banking System Liquidity
A huge liquidity deficit in the financial system kept interbank rates elevated in the money market. Following three days of a liquidity shortage in the money market, local deposit money banks turned to borrowing from the Central Bank of Nigeria’s (CBN) Standing Lending Facility (SLF).
On Thursday, the Nigerian Interbank Offered Rate (NIBOR) experienced mixed movements across all maturities, analysts said in a note. Reflecting the liquidity and funding conditions, the open repo rate and the overnight lending rate fell by 0.23% and 0.01%, closing at 32.18% and 32.71%, respectively.
The liquidity balance in the financial deteriorated following the net Nigerian Treasury bills auction settlement of N252.17 billion on Thursday. As a result, the short-term benchmark interest remained elevated, and analysts expect interbank rates to remain elevated in the absence of a significant increase in inflows.
The deficit in the banking system widened to N1.597 trillion on Thursday. Despite the decline in liquidity, funding rates eased. #Interbank Rates Ease on Tight Banking System Liquidity FCT-IRS Creates Unit for High-Net-Worth Individuals to Boost IGR
