Money Market Rates Ease as System Liquidity Climbs to N810bn
Money market or funding rates fell further as liquidity levels in the banking system increased as a result of cash reserve refunds and inflows from matured OMO bills worth N317.66 billion.
These inflows increased the amount in the financial system to about N810 billion on Tuesday from N402 billion, ready to be tapped by local deposit money banks that require funding.
This happened as demand for liquidity from banks and other financial institutions in relation to the total amount in the banking system on Tuesday. This resulted in both open repurchase and overnight market facilities recording a decline in their respective rates.
In a note, Cowry Asset Limited said the Nigerian Interbank Offered Rate (NIBOR) exhibited mixed movements across tenors. The overnight and 1-month rates declined by 0.14% and 0.03%, closing at 26.86% and 27.35%, respectively, the investment firm stated ahead of huge outflow relating to the bond auction.
Meanwhile, the 3-month rate rose by 0.26% to 28.46%, while the 6-month rate remained unchanged at 28.93% in the absence of pressures in the money market.
Similarly, key money market indicators such as the open repo rate (OPR) and the overnight lending rate recorded declines of 0.08% and 0.11%, settling at 26.50% and 27.00%, respectively.
Market liquidity is anticipated to decline tomorrow, leading to higher interbank rates as the market settles the N606 billion FGN bond auction winnings, traders said. #Money Market Rates Ease as System Liquidity Climbs to N810bn Senate Promises Adequate Funding for Fiscal Responsibility Commission
