Money Market Rates Diverge Amidst Robust System Liquidity
In the money market, the short-term benchmark interest rates moved in different directions amidst an increase in the liquidity level in the financial system.
The short-term benchmark interest rates tracked below 23% since the application of the adjustment made to the asymmetric corridor around the benchmark interest rate in November.
The market liquidity opened the day with a surplus balance of N3.0 trillion, representing an increase of N847.7 billion from the previous level.
The improvement was attributed to the N772.9 billion OMO maturity and N10.2 billion bond coupon inflows, according to AIICO Capital Limited.
Banks have been scaling back parking funds at the Central Bank of Nigeria (CBN) Standing Deposit Facility (SDF) as the rate reduced to 22.5% from 24.50%.
DMB placements at the SDF window slipped 0.2% to N1.99 trillion. Some analysts said the reactions at the window maybe intermittent as banks weigh options in ramping up treasury bets.
Nigerian Interbank Offered Rates climbed broadly across all tenors on Tuesday, with the overnight rate advancing 2bps to 22.80%, reflecting constrained liquidity within the banking system.
The 1-month, 3-month, and 6-month tenors similarly increased by 31 bps, 45 bps, and 33 bps, respectively, according to Cowry Asset Limited.
Money market funding costs displayed divergent behaviour: the Overnight rate eased 6 bps to 22.79%, whereas the Open Repo Rate remained stable at 22.50%.
The composite Nigerian Treasury Bills average yield edged up 1bp to 16.83%, indicating subdued investor interest and cautious positioning in the short-term debt market. Zenith Bank Sees Slight Gain on Huge Trading Volume
