Interbank rates rose as the financial system’s liquidity balance remained tight in the money market, according to independent data from investment firms.
Money market rates have remained high due to a poor financing profile caused by large and consistent outflows related to primary market auctions, debits, and other bank liquidity requirements.
According to Cowry Asset Limited experts, the Nigerian interbank offered rate (NIBOR) has risen across most maturities, signifying illiquidity in the banking sector.
According to statistics from the FMDQ website, important money market rates jumped ahead of FGN coupon payments on Thursday. Further details from the money market showed that the open repo rate increased by 20 basis points to settle at 32.50%. Likewise, the overnight lending rate (O/N) climbed by 0.22% to close at 32.90%, as data from the FMDQ platform confirmed.
Liquidity in the financial system remained very tight as it further plunged into negative territory, AIICO Capital Limited said. Analysts said local deposit money banks pitched their tents at the Central Bank of Nigeria’s (CBN) standing lending facility (SLF) to raise funds to support their daily funding requirements.
Analysts said in the previous day, banks’ exposure to the borrowing window was N1.5 trillion after the previous week’s huge liquidity raise.
