Interbank Rates Mixed as Banks’ Placements at SDF Reduce

Interbank Rates Mixed as Banks’ Placements at SDF Reduce

Money market rates swung in a different direction as liquidity level in the financial system remained robust but declined sharply following liquidity actions by the monetary authority.

The Apex Bank has recently mopped up more than N3 trillion through its open market operation, and a significant amount was sterilised via a treasury bill auction on Wednesday.

These actions tightened liquidity conditions in the financial system, though the money market funding profile closed surplus – keeping rates movement in check. 

The market liquidity opened the day with a moderate surplus balance of ₦1.4 trillion, representing a 23% decline from the previous level, driven by a ₦400.47 billion net NTB settlement. The market also recorded an inflow of ₦689.6 billion from Treasury bills maturity.

The market liquidity condition was further impacted by 34% reduction in Deposit Money Banks’ (DMBs) placement at the Central Bank Standard Deposit Facility (SDF).

Banks’ placement at the SDF window reduced to ₦1.7 trillion from ₦2.5 trillion. In reacting to changing liquidity conditions, the average funding rate eased by 5 bps as the Open Repo Rate (OPR) was steady at 24.50%.

Meanwhile, the overnight lending slipped 9 bps to 24.83%.  The market expects the money market funding rate to be at a similar level barring any fund activities. # Interbank Rates Mixed as Banks’ Placements at SDF Reduce GTCO Slides Amidst Multiple Block Transactions