Interbank money market rates climbed on Tuesday as liquidity levels in the banking system tightened. According to statistics from the FMDQ platform, funding rates increased by 36% each due to continuous liquidity tightening.
The market saw N20.50 billion inflows from matured OMO notes without the Central Bank refinancing them. Nigerian interbank offered (NIBOR) rates fluctuate, prompting cash-rich local deposit money institutions to charge higher interest rates to part with their free cash.
As a result, the Open Repo Rate (OPR) and the Overnight Lending Rate increased by 47 and 22 basis points, respectively, to 36.61% and 36.97%, according to analysts in a note.
In the Nigerian Interbank Treasury Bills market, rates showed mixed results, with increases of 8bps and 18bps for the 1-month and 12-month tenors, Cowry Asset Limited said in a note.
Meanwhile, the 3-month and 6-month tenors saw declines of 2bps and 32bps, respectively. MarketForces Africa reported that the financial system liquidity remained positive for most of the trading period before it turned negative by the end of the week.
As a result, the Open Repo Rate and the Overnight Rate increased by 778 bps and 791 bps to 33.39% and 33.97% respectively, compared to the previous week. Analysts said they expect system liquidity to stay frail, in the absence of any major inflow.
The OMO bill maturity inflows increased the liquidity level to N666.64 billion on Tuesday from N664.41 billion at the beginning of the week, according to Futureview Financial Services Limited.
