Money Market Rates Crash as FAAC Credit Boosts Liquidity
Pressure in the money market eased as inflows boosted the total balance in the financial system. Short-term benchmark interest rates declined as the financial system remained strong after the Federal Account Allocation Committee credit.
Banks borrow from the Central Bank of Nigeria (CBN) due to improved liquidity levels in the money market, driven by inflows from FAAC and FGN bond coupons.
Data from the FMDQ platform showed that the open repo rate declined by 605 bps to 25.34%, while the overnight rate decreased by 621 bps to 25.81%.
The Nigerian Interbank Treasury Bill’s True Yield rates closed in the mix, with increases seen across the 1-month and 3-month tenors, signifying positive investor sentiment.
As a result, the secondary market for Nigerian Treasury Bills was active and bullish, resulting in a 4-basis point drop in the average T-bill yield to 22.56%. #Money Market Rates Crash as FAAC Credit Boosts Liquidity
