Money Market Rates Steady as Excess Liquidity Drops to N6trn
Money market rates steadied as the Nigerian financial system opened strongly despite a large outflow from the settlement of OMO bills. The Nigerian overnight financing rate hovered at the 20% floor level, reflecting well-priced money market dynamics
Deposit Money Banks (DMBs) continued parking excess funds with the Apex Bank, as funding pressure eased. Banks continue to augment income sources with money market investment amidst growing default risk driven by economic pressure on individuals and corporates.
At the close of Monday’s trading session, short-term benchmark interest rates were unchanged as the excess credit balance offset the effects of the large outflow.
Market liquidity opened at a credit balance of ₦6.09 trillion, down ₦2.42 trillion from Friday’s closing level of ₦8.51 trillion. The financial system is expected to receive about ₦2.3 trillion in additional inflows from expired OMO bills ahead of midweek Treasury bills auction sales.
Short-term funding conditions remained stable, with the Overnight (O/N) and Open Repo (OPR) rates holding steady at 20.20% and 20.00%, respectively.
Money market liquidity is expected to remain comfortable, supported by the anticipated maturity of ₦2.297 trillion in OMOs, Herwood Securities Limited said in its market update.
Interbank rates are likely to remain around current levels, although further movements will depend on changes in system liquidity, the investment firm said. Foreign Investors Pivot into US Dollar Bonds, Yields Ease
