Money Market Rates Mixed as Banks Put Excess Cash with CBN
The short-term benchmark interest rates diverged as deposit money banks with excess cash pumped the funds into the Central Bank of Nigeria (CBN) standing deposit facility (SDF).
Sequences of inflows into the money market have reduced pressure on the financial system, and this has reversed banks borrowing from the CBN to meet funding needs. Hence, rates movements have been put in check over the recent past weeks in the absence of pressures on the financial system’s liquidity levels.
On Thursday, system liquidity remained largely robust despite a net Nigerian Treasury bills repayment of N344.6 billion, a slew of investment banking firms said in separate report. As a result, interbank rates were steady, hovering around the 26.0% level, reflecting stable funding conditions in the money market.
Data showed that funding levels soared by 68% to ₦1.60 trillion, buoyed by substantial inflows into the Standing Deposit Facility (SDF) window of the CBN.
TrustBanc Financial Group Limited reported that local banks placed a total of ₦1.80 trillion into the SDF. Consequently, the open repo rate held firm at 26.50% for the third consecutive day, while the overnight rate inched lower by 3 bps to 26.85%. Considering the current liquidity balance, analysts said they expect funding rates to remain around prevailing levels.
This continued cash surplus kept short-term rates stable near 26.5%. Barring any significant disruptions to system liquidity, interbank rates are likely to remain anchored near their present levels in the coming sessions. #Money Market Rates Mixed as Banks Put Excess Cash with CBN#
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