Money market rates fell further on Monday, as the financial system’s liquidity remained high. The liquidity level was increased by a torrent of inflows into the financial system, including over N900 billion in FAAC credits, coupon payments on FGN borrowing instruments, and others.
Because there was no major pressure on liquidity levels, short-term benchmark interest fell further as the Central Bank of Nigeria (CBN) announced plans to ease restrictions on the standing lending facility window.
The Apex Bank announced that it has authorized authorised dealers, banks, and other qualified players to access funds from its standing lending facility at 31.75% as a result of the monetary policy committee’s modification to the upper corridor of standing facilities.
“The suspension of standing lending facility is hereby lifted and authorised dealers should send their requests for SLF through Securities Settlement System within the opening hours of 5.00pm to 6.30pm”, the CBN said in a notice.
The Nigerian interbank offered rate (NIBOR) rates continued to decline across tenors in the money market, reflecting sufficient system liquidity, Cowry Asset Limited said in its market update.
The investment firm said the overnight NIBOR notably dropped by 263 basis points to 23.33% on Monday, as banks with excess liquidity sought lower borrowing rates.
Key money market rates such as the open repo rate (OPR) and overnight lending rate (O/N) decreased by 81bps and 67bps to close at24.97% and 25.50%, respectively due to ample system liquidity.
“We anticipate that interbank rates will rise tomorrow, depending on the outcome of today’s OMO bills primary market auction”, AIICO Capital Limited said.
