Money Market Rates Drop as CBN Reopens Borrowing Window

Money Market Rates Drop as CBN Reopens Borrowing Window

Money market rates decline further on Monday as liquidity level in the financial system remains strong. The liquidity level was boosted by flood of inflows into the financial system, including more than N900 billion FAAC credits, and coupon payment on FGN borrowing instrument and others.

Due to absence of significant pressure on liquidity level, short-term benchmark interest dipped further as the Central Bank of Nigeria (CBN) announced decision to lift restriction of standing lending facility window.

The Apex Bank revealed that it has permitted authorised dealers banks, and other eligible players to access funds from its standing lending facility at 31.75% on account of adjustment made by the monetary policy committee to upper corridor of standing facilities.

“The suspension of standing lending facility is hereby lifted and authorised dealers should send their requests for SLF through Securities Settlement System within the opening hours of 5.00pm to 6.30pm”, the CBN said in a notice.

The Nigerian interbank offered rate (NIBOR) rates continued to decline across tenors in the money market, reflecting sufficient system liquidity, Cowry Asset Limited said in its market update.

The investment firm said the overnight NIBOR notably dropped by 263 basis points to 23.33% on Monday, as banks with excess liquidity sought lower borrowing rates.

Key money market rates such as the open repo rate (OPR) and overnight lending rate (O/N) decreased by 81bps and 67bps to close at24.97% and 25.50%, respectively due to ample system liquidity.

“We anticipate that interbank rates will rise tomorrow, depending on the outcome of today’s OMO bills primary market auction”, AIICO Capital Limited said. #Money Market Rates Drop as CBN Reopens Borrowing Window

Naira, External Reserves Plummets amidst Erratic FX Intervention