Money market rates presented a mixed picture as liquidity shortages forced banks to rely on CBN funding support. Liquidity constraints have driven short-term rates in the financial market above 32%, reflecting current market conditions.
Data from the FMDQ platform revealed that the Open Repo Rate (OPR) increased by 0.34%, while the Overnight Lending Rate (O/N) fell by 0.10%, closing at 32.41% and 32.72%, respectively. The financial system’s liquidity worsened following the settlement of a significant OMO auction and the lack of substantial inflows.
With approximately ₦102 billion inflows from matured OMO bills on Wednesday, liquidity levels stood at ₦1.28 trillion. However, TrustBanc Financial Group noted that banks borrowed ₦1.54 trillion to address tight liquidity conditions.
Today, liquidity constraints persisted, compelling more banks to utilize the CBN’s Standing Lending Facility (SLF) for operational funding, according to AIICO Capital Limited. Analysts expect short-term interbank rates to remain elevated in the absence of significant inflows.
“In the near term, we anticipate depressed liquidity levels, with interbank funding rates staying elevated,” stated analysts at TrustBanc in a note.
The Nigerian Interbank Offered Rate (NIBOR) declined across most maturities, except for Overnight NIBOR, which continued to reflect the prevailing liquidity shortages in the banking system.
