OMO Inflows Drive Nigeria’s Financial System Liquidity 72% Higher
Financial system liquidity surged by about 72% to N3.10 trillion, supported by N1.46 trillion in inflows from matured OMO bills that were not refinanced by the Apex Bank.
The expanded money market liquidity profile kept interbank rates in check amidst a hold decision by the Monetary Policy Committee of the Central Bank.
Data obtained by MarketForces Africa showed that excess liquidity in the financial system increased to N3.109 trillion, from N1.812 trillion.
Hence, the open repo rate was stable at 22%, but the overnight lending rate increased by 3 basis points to 22.1%, data obtained from the FMDQ platform confirmed.
With the funding profile, Nigerian overnight financial rate was stable at 22%, reflecting the absence of significant pressures on financial system liquidity.
Money market dynamics were stable as the Central Bank of Nigeria’s Monetary Policy Committee retained the benchmark interest rate at 26.50%. There was little adjustment as the authority kept the asymmetric corridor around the monetary policy rate at +50 bps/-450 bps.
The market anticipated that funding rates would face moderate upward pressure due to the settlement of the July FGN Bond PMA, which will temporarily reduce system liquidity.
The debt office sold less than N1 trillion in local bonds to investors on Monday due to disciplined pricing. Nigeria’s Economy on Steady Growth, Tinubu Tells Deloitte Africa
