Interbank Rates Increase as Banks Play at CBN Lending Facility

Interbank rates increased as the liquidity balance in the financial system remained tight in the money market, investment firms said in separate reports.

Money market rates have remained on the high side due to weak funding profile, triggered by strong and persistent outflows relating to primary market auctions, debits and other banks liquidity demand.

Nigerian interbank offered rate (NIBOR) rose across most maturities signaling Illiquidity in the banking system, analysts at Cowry Asset Limited said in a note.

According to data from the FMDQ platform, key money market rates jerked up ahead of inflows from FGN coupon payment on Thursday.

Further details from the money market showed that Open Repo Rate increased by 20 basis points to settle at 32.50%.  Likewise, the Overnight Lending Rate (O/N) climbed by 0.22% to close at 32.90%, as data from the FMDQ platform confirmed.

Liquidity in the financial system remained very tight as it further plunged into negative territory, AIICO Capital Limited said.

Analysts said local deposit money banks pitched their tents at the Central Bank of Nigeria (CBN) standing lending facility (SLF) to raise funds to support their daily funding requirements.

Analysts said in the previous day, banks’ exposure to the borrowing window was N1.5 trillion after the previous week’s huge liquidity raise. #Interbank Rates Increase as Banks Play at CBN Lending Facility

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