Pressure Eased on Interbank Rates Day after CRR Debits

Pressure Eased on Interbank Rates Day after CRR Debits

Pressure on interbank funding rates eased on Tuesday, after yesterday’s Retail secondary market intervention sales (SMIS) auction and cash reserve ratio (CRR) debits by the apex bank.

At today’s session’s open, financial system liquidity declined to ₦268.56 billion from ₦778.03 billion previously. 

Analysts at Chapel Hill Denham said the Open Buy Back and Overnight rates fell to 9.00% and 10.08% respectively from 13.33% and 14.33% previously.

Meanwhile, the fixed income market recorded a mixed performance.

Analysts at Chapel Hill explained that sentiments were bullish at the front end of the curve, with the benchmark Nigerian Treasury Bill rate declining by 3bps to 2.04%.

The average benchmark open market operation (OMO) rate fell by 15bps to 3.51%.

Also, in the bond market, sentiment remained bearish, as the average yield on benchmark bonds rose further by 9bps to 7.11%.

“This was driven by sell-offs on long TTMs by 62bps to 9.36%”, Chapel Hill said.        

Similarly, the foreign exchange rate depreciated by -0.26% or N1.00 to 389.00 at the Investors and Exporters Window, while parallel market rate depreciated to ₦474 from ₦473.

The official and SMIS rates were unchanged at 381 and 380.69 respectively, based on data from the FMDQ, although the CBN quoted the official rate at 360 on its website.

Month to date, the nation’s external reserves dropped 1.2% before it closed at US$35.9 billion 3 August 2020.

Read Also: Foreign Exchange Liquidity Remains Weak as CBN Plays Ostrich

In the equities market, the Nigerian Stock Exchange (NSE) closed today’s session positive.

The NSE All Share Index gained 31bps to 24,841.94pts with year to date loss of 7.45% while market capitalisation closed at ₦12.96trillion.Pressure Eased on Interbank Rates Day after CRR Debits

Today’s best performing stocks were Mansard Plc  which gained +9.72% to ₦1.58, UAC of Nigeria surged +8.73% to N6.85 and Jaiz Bank Plc lifted +7.27% to ₦1.11.

On the flip side, the loser’s table was led by CAP Plc which dropped 9.94% to ₦15.40, Total Plc lost 9.91% of its value to close at ₦79.10, and Ardova Plc share price declined 9.67% to ₦12.15. 

Chapel Hill stated that largely, performance across the NSE sectors remained bullish.

The NSE insurance, NSE banking, NSE oil & gas and NSE consumer goods indices advanced by 1.58%, 2.70%, 23bps and 7bps respectively. 

However, the NSE industrial goods index closed lower by 3bps.

Market’s activity was mixed, as volume traded declined by 17.17% while value traded increased by 11.28% respectively to 154 million units and ₦1.458 billion.

Today, the Chapel Hill Denham’s Paramount Equity Fund (PEF) lost 6.18% while the Women Investment Fund (WIF) gained 43bps.

Pressure Eased on Interbank Rates Day after CRR Debits

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