Money Market Rates Ease as Foreign Inflow Boost Liquidity

Money Market Rates Ease as Foreign Inflow Boost Liquidity

Money market rates moderated as inflows from foreign portfolio investors (FPIs) cushioned the impact of the N1.2 trillion OMO auction settlement. The financial system liquidity opened at N199.60 billion, representing a decline of 28% on the day from N278.74 billion brought forward.

Offshore investors that brought hard currency into the market and additional inflows from Treasury bill maturities net off from midweek primary market helped the funding profile to reflate after the cash reserves debited against banks in the recent past week.

The liquidity level increased following additional inflows of N140 billion from the Nigerian Treasury bills repayment. The robust funding profile eased pressures on rates, as banks maintained borrowing from the Central Bank standing lending facility.

Analysts at TrustBanc Financial Group Limited said in a market update that the decline was driven by a 200% surge in standing lending facility outflows to ₦267.09 billion.

The Nigerian Interbank Offered Rate (NIBOR) trended downward across all maturities, reflecting improved liquidity conditions in the banking system. The Nigerian Treasury Bills (NITTY) curve declined across all maturities, indicating lower yields on short- and medium-term instruments.

Nonetheless, the secondary market maintained a bullish tone, with strong investor demand pushing the average yield down by 27 basis points to 19.08%. Data from the FMDQ platform revealed that the repo rate (OPR) dipped 25 basis points to 29.50%, while the Overnight lending rate declined 34bps to 30.08%.

Analysts said the short-term benchmark interest rates are likely to hold steady this week unless unexpected market disruptions occur. #Money Market Rates Ease as Foreign Inflow Boost Liquidity #Crude Oil Prices Increase as US Dollar Slides