Rates Tighten as Money Market Liquidity Crosses N2 trillion
Reflecting a positive credit environment, the short-term benchmark interest rates tightened further in the money market as the liquidity level in the financial system expanded.
According to data released by AIICO Capital Limited, the amount in the financial system increased by N26.93 billion to N2.11 trillion in the absence of funding demand from local banks, and other eligible market players.
The absence of aggressive liquidity mop up activities by the Central Bank of Nigeria (CBN) kept the market significantly liquid, while commercial banks play hard at the Standing Deposit Facility window instead.
Rates are anticipated to remain under check as the interbank market is anticipated to maintain strong liquidity, supporting a solid credit environment.
With no major funding pressures, rates held firm at 26.5%. The Overnight Policy Rate remained at 26.50%, while the Overnight rate decreased by 4 basis points to 26.92%.
The market expects ₦204.87 billion in OMO maturities to keep liquidity strong, hoping that interbank rates will continue to trade around 26.5% in the absence of aggressive mop up.
