Short-term Benchmark Interest Rates Dip Despite CRR Debits
The short-term benchmark interest rates dropped as banking system liquidity levels remained strong after cash reserve ratio debits. At N476 billion, the amount in the financial system appeared robust on Monday, supporting a moderate decline in interbank rates.
The money market rates declined despite the fact that the Central Bank of Nigeria’s (CBN) cash reserve ratio on banks depleted the balance in the financial system. Data revealed that liquidity balance slowed down from N872 billion to N476 billion, having rebounded from N166 billion deficit during the midweek trading session.
Banks borrowing from the standing lending facility of the CBN has decelerated in the absence of significant market activities that could increase demand for funds. The Nigerian Interbank Offered Rate (NIBOR) declined across all maturities, indicating ample liquidity in the banking system, according to Cowry Asset Limited.
Data from the FMDQ platform confirmed that the open repo rate (OPR) dropped by 0.25% to 26.50%, and the overnight lending rate (O/N) also decreased by 0.25% to 27.25%.
On Monday, the financial system liquidity opened lower but remained in positive territory. This decrease was due to the late CRR event that occurred last Friday, AIICO Capital Limited said.
Due to the absence of any major funding needs, interbank rates dropped slightly. Specifically, the overnight policy rate (OPR) and the overnight rate (O/N) decreased by 25 bps, settling at 26.50% and 27.00%, respectively.
Barring any significant funding obligation, analysts said they expect liquidity levels to remain positive and funding rates to trade at current levels. #Short-term Benchmark Interest Rates Dip Despite CRR Debits FBN Holdings Records Huge Off-Market Shares Transactions
