Interbank rates exhibited mixed movements on Tuesday, reflecting signs of improved liquidity in the financial system. The easing of liquidity pressure was attributed to inflows from signature bonuses and Federal Government of Nigeria (FGN) coupon payments. However, banks continued to utilize the standing lending facility to address funding gaps.
Market data revealed a 33% reduction in the banking system’s deficit balance, with the shortfall decreasing to N896.4 billion from N1.348 trillion at the start of the day. Despite these inflows, liquidity constraints persisted, and deficits remained unresolved ahead of anticipated credits from the Federal Account Allocation Committee.
As a result, the Nigerian Interbank Offered Rate (NIBOR) demonstrated varied movements across maturities, according to a report by Cowry Asset Limited. Elevated funding pressure kept interbank rates high, prompting continued borrowing by banks through the Central Bank of Nigeria’s (CBN) lending facility.
Data from the FMDQ platform showed a slight increase in the open repo rate (OPR), which rose by 0.11% to close at 32.33%. Conversely, the overnight lending rate (O/N) dipped marginally by 0.06%, closing at 32.75%.
Analysts predict that money market rates will remain tight in the short term, influenced by ongoing liquidity challenges and additional outflows from upcoming bond auctions.
