Interbank rates fell considerably amid a massive outflow from FX auction sales to authorized deposit money institutions last week. Money market rates have been over 32% in recent weeks, owing to the liquidity imbalance.
Some banks have borrowed from the Central Bank of Nigeria’s standing lending facility (SLF) to improve their liquidity position.
Similar to money market rates, which have been in the double digits, the Apex Bank raised the SLF rate to 31.75% in September in response to monetary policy rate changes. According to statistics from the FMDQ website, money market rates fell below 28% as the financial system’s liquidity balance increased.
According to reports, system liquidity strengthened further after FAAC inflows shifted the liquidity situation from deficit to positive balance. On Monday, the financial market saw ₦259.35 billion in fresh inflows from the FGN Bond coupon.
However, rates remain around 27% because to the settlement involving the CBN’s foreign currency intervention. Cowry Asset Limited reported varied developments in Nigerian interbank borrowing rates (NIBOR) across various maturities.
The overnight NIBOR and 1-month tenor declined by 0.25% and 0.19%, respectively, to 27.88% and 27.06%, indicating higher liquidity in the banking sector.
Key short-term benchmark interest rates, including the Open Repo Rate (OPR) and the Overnight Lending Rate (O/N), fell by 2.46% and 2.41%, respectively, to 27.32% and 27.73%.
Analysts stated that anticipate an improvement in system liquidity on Tuesday as markets expect OMO bill maturity inflows to hit the system.
