Money Market Rates Steady Amidst Widening Banking Deficit
Money market rates closed steadied amidst widening deficit in the banking system. The liquidity levels in the money market deteriorated further, plunging deeper into negative territory on Thursday.
This happened after the settlement of ₦516.59 billion for Nigerian Treasury bills auction sold to investors, and inflows from matured bills at the same time. The Nigerian Interbank Offered Rate (NIBOR) rose across all tenors, indicating tight liquidity conditions in the banking system.
Data from the FMDQ platform confirmed that interbank rates remained high, with the Overnight Policy Rate (OPR) and Overnight Rate (O/N) reaching 32.33% and 32.75%, respectively.
In the absence of significant inflows into money market as the week runs down, analyst are projecting that the short term benchmark interest rates would remained elevated.
“We anticipate that interbank rates will remain high unless there is a substantial inflow of funds”, AIICO Capital Limited said in a note. Deficit in the banking system deepened further by 178%, closing at ₦855.77 billion on Thursday, TrustBanc Financial Group Limited said in an investors note.
The firm expects the strain on system liquidity to persist, keeping funding rates at elevated levels. Also, the Nigerian Interbank Treasury Bills True Yield rose across most tenors due to sell pressures followed plan to raise liquidity. #Money Market Rates Steady Amidst Widening Banking Deficit#
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