Interbank Rates Ease as Remita, States Inflows Boost Liquidity
Money market rates fell as Remita and other states inflows bolstered liquidity levels in the financial system. The market also experienced banks depositing excess cash with the Central Bank of Nigeria’s (CBN) Standing Deposit Facility in the absence of funding pressures.
The short-term benchmark interest rate movements were kept in check as the banking system liquidity ended the day in surplus, closing at more than N534 billion on Tuesday.
Hence, the Nigerian Interbank Offered Rate (NIBOR) declined across all tenors, indicating improved liquidity conditions in the banking system. The liquidity injection prompted a modest easing in interbank rates: the Overnight Policy Rate (OPR) fell 9 bps to 26.58%, while the Overnight Rate (O/N) dropped 17 bps to 27.04%.
TrustBanc Financial Group Limited detailed that system liquidity jumped by 84%, closing with a surplus of ₦534.3 billion. The surge was driven by increased placements totaling ₦716.22 billion by DMBs into the CBN’s Standing Deposit Facility (SDF) window.
Analysts said barring any unforeseen outflows, liquidity levels are expected to remain stable, with funding rates likely to hover around current levels in the near term.
Also, the Nigerian Interbank Treasury Bills True Yield (NITTY) declined across most tenors, except for the 3-month tenor, which rose by 0.04% to 19.10%, reflecting bullish sentiment in the secondary market for Nigerian Treasury Bills. Nonetheless, heightened investor demand pushed the average yield down #Interbank Rates Ease as Remita, States Inflows Boost Liquidity MTN Nigeria Net Loss Grows by 192% to N400 billion
