Short-term benchmark interest rates held steady amid tight liquidity in the money market ahead of ₦1.14 trillion inflows from Open Market Operation (OMO) bill maturities scheduled for Tuesday.
Money market rates hovered around 26.5%, with interbank rates expected to remain stable at this level, supported by the anticipated liquidity boost. The Nigerian Interbank Offered Rate (NIBOR) for overnight tenor stood at 26.83%, while the 1-month, 3-month, and 6-month tenors dipped slightly to 26.97%, 27.69%, and 28.20%, respectively, according to Cowry Asset Limited.
Key benchmark rates, including the Open Repo Rate (OPR) and Overnight Lending Rate (OVN), remained unchanged at 26.50% and 26.96%, respectively, as markets awaited the Central Bank of Nigeria’s upcoming policy announcement.
The Nigerian Interbank Treasury Bills True Yield (NITTY) curve rose across all tenors, reflecting increased investor interest in short-term instruments despite upward pressure on yields. The secondary market for Nigerian Treasury Bills saw average yields ease by 23 basis points to 20.81%, indicating strong demand.
Last week saw fluctuations in funding costs, initially rising due to tighter liquidity from net FX settlements and increased bank reliance on the standing lending facility (SLF). Midweek liquidity fell to about ₦77 billion but improved later, aided by ₦175.6 billion coupon inflows from the FGN May 2033 bond, ending the week with liquidity at ₦423.9 billion.
CSL Stockbrokers noted that while settlement for the Sukuk issuance may exert pressure on funding rates, expected coupon payments from the FGN 2029 bond and maturing OMO bills should ease liquidity strains this week.
Overall, average funding rates remained steady, with the open repo at 26.50% and overnight lending at 26.96%.
