Money Market Rates Cross 36% over Tight Liquidity
Interbank rates rose in the money market on Tuesday due to strain on liquidity levels in the financial system. According to data from the FMDQ platform, funding rates crossed 36% apiece over sustained liquidity tightening.
The market witnessed N20.50 billion inflows from the matured OMO bills without the Central Bank refinancing it. Nigerian interbank offered (NIBOR) rates swing, leading cash-rich local deposit money banks to impose higher rates to part with their free cash.
Consequently, the Open Repo Rate (OPR) and the Overnight Lending Rate rose by 47 basis points and 22 basis points, reaching 36.61% and 36.97%, respectively, analysts said in a note.
In the Nigerian Interbank Treasury Bills market, rates showed mixed results, with increases of 8bps and 18bps for the 1-month and 12-month tenors, Cowry Asset Limited said in a note.
Meanwhile, the 3-month and 6-month tenors saw declines of 2bps and 32bps, respectively. MarketForces Africa reported that the financial system liquidity remained positive for most of the trading period before it turned negative by the end of the week.
As a result, the Open Repo Rate and the Overnight Rate increased by 778 bps and 791 bps to 33.39% and 33.97% respectively, compared to the previous week. Analysts said they expect system liquidity to stay frail, in the absence of any major inflow.
The OMO bill maturity inflows increased the liquidity level to N666.64 billion on Tuesday from N664.41 billion at the beginning of the week, according to Futureview Financial Services Limited. #Money Market Rates Cross 36% over Tight Liquidity CBN Defends Naira with $39m in Forex Market
