The volume of cash in the interbank money market jumped last week to, triggering 156 percent excess demand for government securities.
The volume of excess liquidity in the interbank money market rose by 32 per cent from N277 billion the previous week, to close at N408.3 billion last week.
The rise was driven by fresh inflow of N141 billion from statutory allocation funds, and N144 billion from payment of matured treasury bills.
To this end, investors demanded for N498 billion worth of government securities (treasury bills), representing 156 per cent higher than the N194 billion offered for sale by the Central Bank of Nigeria, CBN.
At the secondary market where existing bills are traded, investors demanded for N394 billion worth of bills while the apex bank offered N50 billion, but did not sell any bill.
At the Primary market, where fresh bills are sold, investors demanded N394 billion worth of bills, while the apex bank offered and sold N144 billion.
Also reflecting the impact of the improved liquidity, cost of funds remained relatively stable during the week between 2.0 and 2.5 per cent.
Meanwhile the Central Bank of Nigeria (CBN) spent about $700 million to defend the naira in May.
