Money market rates posted mixed movements on Tuesday, even as overall liquidity in the banking sector remained relatively stable following the Central Bank of Nigeria’s (CBN) recent foreign exchange (FX) intervention and subsequent settlement.
System liquidity moderated to approximately ₦757 billion, following outflows related to the naira-equivalent settlement of recent U.S. dollar sales to authorised banks. The apex bank’s intervention in the FX market saw it sell $321.71 million over two days, resulting in reduced liquidity but limited pressure on interest rate levels.
Consequently, the overnight lending rate dipped marginally by one basis point to close at 26.9%, amid the absence of significant funding demand. In response, the Nigerian Interbank Offered Rate (NIBOR) declined across most short-term tenors, reflecting a still-healthy liquidity environment.
The Open Buy Back (OBB) rate rose slightly by 0.40% to close at 26.90%, while the Overnight (ON) lending rate edged lower by 0.41% to finish at 26.54%. Meanwhile, yields on Nigerian interbank treasury bills moved inconsistently across the curve, and the secondary NTB market turned bearish.
Analysts noted in separate commentaries that interbank funding costs may inch upward in the coming sessions as the financial system adjusts to further FX settlement outflows expected from the CBN.
