Money market rates continued their downward trend as liquidity in the financial system surged beyond N1.5 trillion. The liquidity level remained strong due to the absence of outflows, as neither the Debt Management Office nor the Central Bank of Nigeria conducted auctions for borrowing instruments during the week.
With no cash reserve maintenance requirements or primary market activities, deposit money banks faced minimal liquidity demands for their operations. This sustained the money market’s net long position over the past two days.
As a result, short-term benchmark interest rates dropped below 27%. Analysts expect funding rates to remain stable at current levels. On Thursday, available liquidity in the money market rose by 2% to N1.53 trillion, according to a report by TrustBanc Financial Group Limited.
The Nigerian Interbank Offered Rate (NIBOR) declined across most tenors, except for the overnight rate, which edged up by 2 basis points to 26.86%. Data from the FMDQ platform showed the Open Repo (OPR) rate fell by 8 basis points to 26.42%, while the Overnight (O/N) rate also dipped by 8 basis points to 26.88%.
Analysts anticipate that interbank rates will remain stable unless there are unexpected liquidity withdrawals. Meanwhile, the Nigerian Interbank Treasury Bills True Yield (NITTY) rose across most tenors, and the secondary market for Nigerian Treasury Bills saw a bullish trend, driven by strong investor demand that pushed the average yield down by 0.03% to 19.38%.
