Liquidity: Interbank Rates Decline in Absence of Funding Pressure
In the money market, liquidity levels declined despite a significant outflow relating to the Central Bank of Nigeria’s (CBN) OMO bill auction settlement. Data from the FMDQ platform confirmed that short-term benchmark interest rates eased irrespective amidst midweek Treasury bills auction sales.
Banks demand for funding has yet to pick up as markets prepare for huge local borrowing to finance Nigeria’s 2025 budget deficit.
The Nigerian Interbank Offered Rate (NIBOR) fell across all maturities, signalling sufficient liquidity balance in the banking system yesterday, investment banking firm Cowry Asset Limited told investors in a note.
The market report revealed that the open repo rate (OPR) and overnight lending rate (O/N) fell by 0.90% and 1.10%, closing at 27.00% and 27.50%, respectively.
The liquidity in the banking system declined by 42%, opening the day at ₦459.79 billion from about N798 billion in the previous day. The liquidity declined following the OMO auction settlement.
Money market analysts expect rates to remain at similar levels in the immediate term in the absence of significant funding pressures and inflows from maturing instruments. #Liquidity: Interbank Rates Decline in Absence of Funding Pressure Africa Prudential Hits 52-week High
