Short term funding costs remained under pressure in the Nigerian interbank market as system liquidity stayed in deficit, keeping benchmark overnight rates above the 32 percent handle despite only modest cash improvements. Data from FMDQ showed interbank funding quoted around 32.5 percent amid thin inflows.
AIICO Capital reported that the Overnight Policy Rate edged up by 8 bps to 32.25 percent, while the overnight lending rate eased by 9 bps to 32.58 percent, reflecting tight but choppy funding conditions.
System liquidity closed with a deficit of N247.53 billion, an improvement from N280.57 billion the previous day, as banks tapped the Central Bank standing lending facility to plug daily gaps. Funding stressed institutions continued to borrow, while cash rich tier one lenders demanded higher returns before releasing funds.
With no material inflows from maturing instruments and no primary market auctions so far this week, dealers expect liquidity to weaken again and the deficit to widen by the close of trade on Friday, keeping money market rates elevated.
Activity in Nigerian Treasury Bills remained muted. The NITTY curve posted mixed yield movements across the strip as investor interest stayed light and the market marked time. Average secondary market yield held broadly steady at 18.36 percent.
