Interbank Rates Fall as ‘Bullet Payments’ Boost Liquidity
The interbank rates slid as bullet payments from matured OMO bills and inflows from Federal Government of Nigeria (FGN) bond coupons boosted the liquidity level in the financial system.
The market receives a strong inflow from FGN bond coupon worth N86 billion apart from additional inflows from OMO bills. The increased liquidity balance in the money market dragged rates lower after local deposit money banks sought funding support from the Central Bank borrowing window in the recent past week.
Most of the activities at the Central Bank window was driven by Tier-2 banks borrowing while cash-rich lenders sought relatively lower rates to part with excess funds.
Banks access funds from standing lending facility window at a steep rates while payment received on deposit made at the apex bank facility was lower.
Investment analysts said Banks requires funding to meet up their respective business and regulatory demands on daily basis.
Traders reported that system liquidity improved on Tuesday, although it remained in the negative territory. Analysts said inflows from OMO maturities and FGN bond coupons drove the mild improvement in the liquidity balance in the financial market.
Nigerian interbank offered rates declined across all tenors reflecting system liquidity, according to Cowry Asset Limited. According to data from the FMDQ platform, the Open Repo Rate (OPR) decreased by 74 bps to 30.46%, and the overnight lending rate decreased by 73 bps to 31.00%.
Analysts at AIICO Capital Limited said they expect further improvement tomorrow as more coupons hit the system. # Interbank Rates Slide as ‘Bullet Payments’ Boost Liquidity Oando Jumps by 1,154% from 52-Week Low as Market Price in Acquisition
