Modupe Gbadeyanka
By Modupe Gbadeyanka
There are expectations that interbank interest rates will further moderate further this week at the money market amid anticipated ease in financial system liquidity.
This, according to analysts at Cowry Asset, is predicted to happen as treasury bills worth N83.37 billion will mature via the secondary market.
Last week, the Central Bank of Nigeria (CBN) refinanced matured T-bills worth N223.23 billion via the primary market and amid the request for higher returns from portfolio investors, stop rates increased marginally for most maturities.
Specifically, stop rates for 91-day and 364-day rose to 9.75 percent from 9.74 percent and 11.18 percent from 11.14 percent respectively, while stop rate for 182-day instrument moderated to 10.60 percent from 10.75 percent.
According to the Lagos-based investment firm, the matured T-bills worth N223.23 billion, the N88.68 billion matured OMO bills as well as the effect of the federally distributed revenue of N762.50 billion surpassed the auctioned treasury bills worth N223.23 billion.
Consequently, the net inflows resulted in financial system liquidity ease and a resultant reduction in interbank offered rates for most tenor buckets: NIBOR for overnight funds, 3 months and 6 months tenure buckets fell to 6.75 percent from 21.05 percent, 11.27 percent from 11.96 percent and 12.38 percent from 12.71 percent respectively. However, NIBOR for 1 month tenure bucket increased to 10.86 percent from 10.81 percent.
Elsewhere, NITTY fell for most maturities tracked amid sustained demand pressure – yields on 3 months, 6 months and 12 months maturities dipped to 10.08 percent from 10.58 percent, 11.09 percent from 11.43 percent and 11.99 percent from 12.05 percent respectively, but NITTY for one month rose to 9.72 percent from 9.04 percent.
