By Modupe Gbadeyanka
The cost of funds declined on Tuesday as there were no significant inflows into the system, Business Post is reporting.
At the close of business yesterday, the average money market rate declined by 15.30 percent to settle at 26.83 percent.
Specifically, the Open Buy Back (OBB) rate lost 12.77 percent to close on Tuesday at 24.14 percent from 39.92 percent, while the Overnight (OVN) rate declined by 17.83 percent to end at 26.50 percent from 44.33 percent.
According to Zedcrest Research, the system liquidity yesterday was estimated to be much unchanged from its opening levels of N50 billion positive.
The rates are expected to remain slightly above the 20 percent mark as there are also no significant inflows expected today.
Meanwhile, the treasury bills market was generally slightly bearish yesterday, with yields ticking higher by 0.15 percent on the back of expectations for the PMA today.
However, there was a significant demand for bills on the shorter end of the curve (Jan maturities) as market players priced in expectations for lower clearing rates on the tenor at today’s PMA.
Due to the relatively tight level of system liquidity, and expectations for a possible supply of the PMA bills at Thursday’s OMO, rates at the auction today are expected to clear slightly above their previous levels.
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