Funding Rates Diverge Amidst Treasury Bills Auction Debit
The funding rates diverged due to liquidity fluctuation following the Nigerian Treasury bills midweek auction settlement. Money market rates have been relatively steady following huge inflows worth N1.14 trillion from OMO bills maturities.
This caused rates on short term financing to hover behind 27%, though some banks were in the Central Bank standing lending facility earlier in the week to borrow to fund operations. Liquidity stayed positive despite debit for Nigerian Treasury bills and OMO bills offered on Tuesday.
At the close of trading session on Thursday, the Nigerian Interbank Offered Rate (NIBOR) trended upward across most tenors, except for the overnight rate, which declined by 2 basis points, according to Cowry Asset Limited.
Meanwhile, key money market benchmark rates showed mixed movements: the Open Repo Rate (OPR) held steady at 26.50%, while the Overnight Lending Rate (OVN) rose by 6 basis points to 26.96%.
The Nigerian Interbank Treasury Bills True Yield curve declined across all tenors. Nonetheless, the secondary market for Nigerian Treasury Bills remained modestly bullish, with average yields dipping by 7 basis points to 20.72%, reflecting continued demand for short-term instruments.
Interbank liquidity improved sharply at the open and remained liquid despite the settlement of the NTB auction, keeping rates steady at 26.50%. Analysts said they expect short term benchmark interest rates to remain stable at present levels barring major funding shocks. #Funding Rates Diverge Amidst Treasury Bills Auction Debit#
