Money Market Rates Mixed Amidst Surplus Liquidity in Financial System
Interbank rates mixed amidst surplus liquidity conditions in the financial system remained robust despite activity of the Central Bank of Nigeria (CBN) to tighten funding profile.
The CBN floated two open market operations where bills worth cumulative of N700 billion were offer to investors subscription. Each auction gained investors attentions, and allotment were debited against the balance in the financial system.
On Thursday, the amount in the financial system reduced to N1.428 trillion from N2.578 trillion the previous day, according to data obtained from AIICO Capital Limited, reflecting huge intraday outflow of about N1.150 trillion.
The strong liqudity condition reduced activities of local deposit momey banks at the CBN standing lending facility window. Banks borrowing at the window reduced in the absence of funding pressures.
Interbank market saw limited activity with no major funding flows, keeping rates flat at 26.5%. Market anticipates rates will hold near 26.5% tomorrow unless major funding pressures emerge.
Nigerian Interbank Borrowing Rate (NIBOR) exhibited a downward trend across most tenors today, with the Overnight rate increasing marginally by 0.13%.
Money market rates displayed mixed dynamics, with the Open Repo Rate (OPR) remaining steady at 26.50%, while the Overnight rate edged up by 8 basis points to 26.96%.
The Nigerian Interbank Treasury Bills True Yield recorded gains across most maturities, with yields on the 3-month, 6-month, and 12-month tenors increasing slightly by 5 basis points, 6 basis points, and 6 basis points, respectively.
The 1- month tenor, however, remained stable at 16.21%. The average yield for NT-Bills rose by 16 basis points to 18.81%, underscoring ongoing weak and negative investor sentiment in the secondary market. #Interbank Rates Mixed on Surplus Financial System Liquidity
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