Short-term Interest Rates Shift as Banking Deficit Expands
The short-term benchmark interest rates expanded as liquidity condition in the financial system worsened following Nigerian government bonds auction settlement.
Due to N271 billion debit for Bond auction, the banking deficit climbed by 54% to N354.51 billion from N56.8 billion the previous day amidst Nigerian Treasury bills auction sales at the primary market.
The deficit conditions in the financial system pushed rates higher, with the Overnight Policy Rate (OPR) rising 492bps to 32.42% and the Overnight Rate (O/N) climbing 450bps to 32.83%.
The banking system is expected to see N808.73 billion Treasury bills auction settlement. However, the financial system is also expected to be bolstered by about N1.18 trillion inflows.
Hence, analysts projected that rates would ease as market expects net repayments of N374.2 billion to boost liquidity levels, potentially shifting the balance from deficit to surplus. #Short-term Interest Rates Shift as Banking Deficit Expands Money Market Rates Steady Amidst Widening Banking Deficit
