Money Market Rates Increase as System Deficit Expands
Money market rates increased as the liquidity deficit in the financial system expanded to N672.71 billion ahead of fresh inflows on Friday.
The liquidity stress triggered a marginal spike in money market rates as a result of Central Bank of Nigeria (CBN) activities. Data from the FMDQ showed that open repo and overnight lending rates climbed 17 basis points apiece.
The outflow that plunged the liquidity position into a deep deficit in the money market was driven by the CBN foreign exchange market intervention settlements and deposit money banks obligations.
The market expects a ₦65.36 billion FGN bond coupon inflow to boost liquidity levels. However, analysts said the amount will not be enough to ease current liquidity tightness, so rates are expected to stay elevated.
NIBOR rates advanced across all tenors, reflecting tightened liquidity conditions in the banking system. Similarly, money market rates trended higher, as the Open Repo Rate (OPR) increased by 17 basis points to 32.42%, while the Overnight (O/N) rate rose by the same margin to 32.75%.
The Nigerian Treasury Bills (NITTY) curve recorded mixed yield movements across all maturities, reflecting varied investor sentiment. Nonetheless, activity in the secondary market remained subdued, with limited trading interest, as the average yield declined marginally to 18.34%. #Money Market Rates Increase as System Deficit Expands GCR Upgrades Globus Bank Ratings with Stable Outlook
