Money Market Rates Diverge, DMBs Placements Decline
The money market rates diverged amidst strong liquidity levels in the financial system as data showed deposit money banks’ (DMBs) placements with the Central Bank of Nigeria (CBN) declined.
Intermarket liquidity reduced with marginal adjustment on funding costs, reflecting excess funding levels with near zero borrowing activity from the Apex Bank.
Broadstreet reported that the liquidity level in the financial system opened the new week with a balance of N1.47 trillion, reflecting an improvement of N49.19 million from the previous close.
This increase was primarily driven by the N617.81 million primary market inflow, which offset the N140.63 million decline in Deposit Money Banks’ (DMBs) placements.
Banks placement at the CBN Standard Deposit Facility (SDF) settled at N1.47 trillion.
Hence, the average funding cost eased by 5 bps to 22.59% as the Open Repo Rate (OPR) remained at 22.50% while the Overnight Rate (OVN) shed 11 bps to close at 22.68%.
Treasury Bills secondary market yields showed varied performance, with the 1-month tenor edging up 1bp, whereas the 3-month, 6-month, and 12-month maturities declined by 32 bps, 14 bps, and 9 bps, respectively.
Overall, the average yield fell 1bp to 18.01% in the secondary market, indicating improved investor confidence in the secondary market. Naira Diverges as Informal Sector’s FX Liquidity Tightens
