Interbank Rates Diverge as Liquidity Surplus Settles at N6.12trn

Interbank Rates Diverge as Liquidity Surplus Settles at N6.12trn

Interbank rates diverged as money market liquidity closed at N6.12 trillion after an open market operation activity of the Central Bank on Monday.

The market liquidity remained in a surplus position at ₦6.12 trillion level as commercial bank deposits with the CBN increased by ₦204.69 billion to ₦5.53 trillion.

Hence, the short-term benchmark interest rate movements were mixed, reflecting the absence of significant funding pressures. The CBN floated N600 billion to mop up excess liquidity.

At the OMO auction, the CBN offered a total of N600.0 billion in the 85-day bills, 99-day bills, and 120-day bills, which attracted strong demand with total subscriptions reaching N4.1 trillion.

Ultimately, the apex bank allotted N998.1 billion, clearing at an average stop rate of 20.1%. Data from the FMDQ revealed that the Open Repo Rate (OPR) held steady at 24.50%, while the Overnight Rate (OVN) dipped by 1 bps to close at 24.88%.

“Interbank rates are expected to moderate lower amidst the expected inflow of ₦905.23 billion OMO maturities and in the absence of any funding activities.” AIICO Capital Limited said.

The Treasury Bills secondary market exhibited divergent trends through NITTY yields. Short- to medium-term rates declined, with 1-month, 3-month, and 6-month yields falling 10 bps, 24 bps, and 6 bps, respectively, while the 12-month yield increased 14 bps. Fidelity Bank Delivers 11.1% Gain in Fresh Rally

Despite these varied movements, the average Nigerian Treasury Bills yield dropped 13 bps to 17.80%, signalling positive and bullish investor sentiment in the secondary market. Last week, system liquidity strengthened to N5.73 trillion from the N4.02 trillion recorded in the prior week.

This was supported by inflows from OMO maturities of N905.23 billion, which offset debits from the FGN bond and OMO allotment of N576.63 billion and N98.00 billion, respectively, in the primary market auction.

 Consequently, interbank rates remained stable, with the Open Repo Rate (OPR) and Overnight Rate (OVN) closing unchanged at 24.50% and 24.89%, respectively. #Interbank Rates Diverge as Liquidity Surplus Settles at N6.12trn