CBN to sustain liquidity for interbank market
The Central Bank of Nigeria, CBN, is expected to sustain its liquidity mop up activities this week in response to inflow of N172 billion into the interbank money market.
Recently, the apex bank mopped up N166 billion by issuing secondary market (Open Market Operations, OMO) treasury bills (TBs). The resulting outflow, which offset inflow of N46.25 billion from matured TBs occasioned 660 basis points (bpts) increase in average short term cost of funds in the interbank money market last week.
Data from FMDQ showed that interest rate on collateralised (Open Buy Back, OBB) lending rose by 643 bpts to 16.29 percent last week from 9.86 percent the previous week. Similarly, interest rate on Overnight lending rose by 672 bpts to 17.29 percent last week from 10.57 percent the previous week.
ALSO READ: Adeleke’s WAEC certificate: What happened in court on Thursday
Analysts at Lagos based investment firm, Afrinvest projected that this trend might persist this week due to expectation that the apex bank will conduct OMO auction to mop up N172 billion inflow from maturing TBs.
They said: “In the coming week, we expect instruments worth a combined N172.5 billion to mature on the 1st (N109.7 billion) and 2nd (N62.8 billion) of May, which should enhance system liquidity in the shortened week. Hence, we anticipate an OMO auction from the CBN at the start of the week, given the long position of the system, as well as another auction when the financial market re-opens on the 2nd of May to manage system liquidity.”
You may be interested
Breaking: Sanwo-Olu announces further relaxation of curfewWebby - October 30, 2020
<!-- Governor Babajide Sanwo-Olu: Approves reopening of schools --> Governor Babajide Sanwo-Olu: Approves reopening of schools By Kazeem Ugbodaga Lagos…
Moment Instagram Comedian, Taaooma’s Boyfriend Proposed To Her In Namibia (Video)Webby - October 30, 2020
Taaoma and boyfriend A popular Instagram comedienne has gotten the surprise of her life after her boyfriend proposed to her…
Horror As Man is Hung Upside Down By His Girlfriend’s Parents For Moving In With Their DaughterWebby - October 30, 2020
Horror As Man is Hung Upside Down By His Girlfriend's Parents For Moving In With Their Daughter A man was…