CBN to sustain liquidity for interbank market

April 29, 2019
166 Views

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

For How Long Is My Motor Insurance Policy Valid?
Business
5 shares74 views
Business
5 shares74 views

For How Long Is My Motor Insurance Policy Valid?

Webby - September 12, 2022

When purchasing auto insurance, you can tailor many aspects, including the types of coverage you select, the amount of your…

Gombe warns politicians against violence, says peace is non-negotiable
News
11 views
News
11 views

Gombe warns politicians against violence, says peace is non-negotiable

Webby - October 2, 2022

Gombe State governor, Muhammadu Inuwa Yahaya, yesterday warned politicians in the state against any act capable of disturbing the peace…

Osun APC primary: No cause for alarm, says Oyetola’s aide
News
1 views
News
1 views

Osun APC primary: No cause for alarm, says Oyetola’s aide

Webby - October 2, 2022

The Chief Press Secretary to Osun Governor, Adegboyega Oyetola, Ismail Omipidan, has appealed to supporters of the governor to remain…

2022 U-17 WWC: Flamingos Beat Galatasaray In Friendly
Sports
1 views
Sports
1 views

2022 U-17 WWC: Flamingos Beat Galatasaray In Friendly

Webby - October 2, 2022

Nigeria’s U17 girls, the Flamingos lashed leading Turkish women’s club, Galatasarary Women 3-1 in a friendly match in the Turkish…

Leave a Comment

Your email address will not be published.