Money market rates fell slightly as liquidity levels in the financial system improved. The latest decline in short-term benchmark interest rates reversed the previous trend seen in the past few weeks.
Funding demand had continuously kept money market rates at double-digit highs, owing to shifting market dynamics and a series of auction-related outflows.
AIICO Capital Limited said that system liquidity improved today, with fewer participants exposed to the Central Bank of Nigeria’s (CBN) standing lending facility (SLF) window.
In its statement, Futureview Financial stated that system liquidity surged to N1.16 trillion on Thursday. MarketForces Africa said that the market has been trading with a negative liquidity balance this week.
Furthermore, there was a negative liquidity balance that persisted over into the week, with certain banks’ exposures to the CBN lending facility increasing dramatically.
Some banks have pitched their tents at the borrowing window to satisfy financing obligations as a result of recent limited liquidity in the financial markets.
Data from the FMDQ platform indicated that the Open Repo Rate (OPR) declined by 22 basis points to 32.28%, while the Overnight Rate (O/N) fell by 32 basis points to 32.58%.
However, the Nigerian interbank offered rate (NIBOR) climbed across most maturities, indicating that the banking system’s liquidity remains relatively low, according to Cowry Asset Limited.
