Interbank Rates Rise as NTB, FX Settlements Drag Liquidity
Money market rates pricing experienced mild pressures over liquidity drag, though the financial system funding profile closed positive again. Interbank rates rose moderately as a result of a huge outflow for the settlement of the Nigerian Treasury bills (NTB) auction conducted on Wednesday with Thursday as settlement day.
Also, the market experienced additional outflow for Central Bank of Nigeria (CBN) FX interventions sales to authorised dealer banks.
Despite the outflows, the liquidity balance in the financial system remained positive despite payment of N424.6 billion for the Treasury bills allotted to investors from N800 billion that was offered at the midweek auction.
The Nigerian Interbank Offered Rate (NIBOR) posted mixed movements across all tenors. The overnight and 6-month rates rose by 0.36% and 0.07% to 27.25% and 27.62%, respectively, while the 1-month and 3-month rates declined by 0.23% and 0.25% to 26.62% and 26.91%.
Key money market indicators trended upward, with the Open Repo Rate (OPR) and the Overnight Lending Rate both rising by 0.33% to 26.83% and 27.29%, respectively.
Investment banking firms reported that the liquidity in the banking system opened the day with a surplus balance of ₦620 billion, largely due to NTB net repayments of ₦502.68 billion.
Barring any significant outflow from the system, analysts said they expect the surplus in the system to persist, keeping interbank rates around current levels. #Interbank Rates Rise as NTB, FX Settlements Drag Liquidity
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