As the total amount in the financial market remained weak, money market rates adjusted upward due to the absence of significant inflows into the system. A higher cash reserves ratio pegged at 50% of total deposit kept a substantial portion of bank deposits with the central bank, limiting liquidity and constraining interbank lending.
The opening system liquidity improved to start the week but remained in negative territory, AIICO Capital Limited said in an update. The Nigerian interbank offered rate (NIBOR) fell across most maturities, signaling improved liquidity in the banking system, Cowry Asset Limited wrote to investors.
The strain of funding levels in the financial system kept the interbank rates elevated, and analysts expect the trend to persist. Specifically, the Open Repo Rate (OPR) increased by 5 basis points to close at 32.28%, according to data from the FMDQ platform.
Also, the overnight lending rate (OVN) advanced by 4 basis points to 32.81%, market data showed. In September, system liquidity received an intermittent boost from FAAC inflows worth ₦903.4 billion.
However, this inflow was moderated by the CBN’s NTB and OMO auctions, which mopped up ₦622.7 billion and ₦712.5 billion, respectively. # Money Market Rates Elevated over Tight Liquidity Stanbic IBTC Adds Fixed Income Asset into Securities Lending Services
-By Julius Alagbe