Money Market Rates Steady Ahead of CBN CRR Operations
Money market rates were steady on the back of a healthy liquidity level in the financial system. Banks tax payments, and open market operations action had drained the funding profile.
The short term benchmark interest rates align along with the monetary policy rate of the Apex bank as market anticipates cash reserve ratio operations on Friday could push drag liquidity in the banking system.
The liquidity level in the financial system opened at about N464 billion, from the peak of N1.576 trillion as a result of liquidity mop up effort. Nigerian banks returned to the Central Bank of Nigeria (CBN) standing lending facility after slowdown in borrowings. The financial market was flooded with free cash before OMO auction earlier in the week.
Market analysts reported that funding activity slowdown on Thursday. Hence, interbank market activities was quiet with no significant funding changes, leaving rates steady at 26.5%.
Some Tier-1 lenders with funding need pitched tents at the CBN standing lending facility, while activity at deposit window eased. The Nigerian Interbank Offered Rate (NIBOR) trended upward across most maturities, except for the overnight rate, which dipped by 0.04%, Cowry Asset Limited said in its note.
Meanwhile, money market rates held steady, with the Open Repo and Overnight rates unchanged at 26.50% and 27.00%, respectively. Analysts at AIICO Capital Limited expressed view that rates could climb toward 28% on Friday if the CBN’s cash reserve ratio operations tighten liquidity.
Elsewhere, the Nigerian Treasury Bills (NITTY) curve trended downward across most maturities, reflecting mixed yield movements in short- and medium-term instruments, while the secondary market remained bullish as average yield dipped 2bps to 19.83%. #Money Market Rates Steady Ahead of CBN CRR Operations Niger Partners FMBN to Address Housing Deficit
