OMO Inflows Ease Pressure on Money Market Rates
The Nigerian money market experienced a decline in rates on Wednesday following significant liquidity injections from an ₦854.46 billion OMO maturity credit, which eased funding pressures for banks.
According to the Central Bank of Nigeria’s (CBN) latest update, the system had been running a ₦95 billion liquidity deficit before the inflow. As a result, banks turned to the CBN’s standing lending facility to meet daily funding needs.
Analysts at AIICO Capital Limited noted that interbank rates fell sharply across key tenors, while Cowry Asset Management Limited reported that the overnight, 1-month, 3-month, and 6-month borrowing rates declined by 2.96%, 1.25%, 1.28%, and 1.01% respectively.
The Open Repo Rate (OPR) dropped by 30 basis points to 32.10%, while the overnight lending rate edged slightly upward by 30 basis points to 32.40%. Meanwhile, yields on Nigerian Treasury Bills moderated across most maturities, though secondary market sell-offs pushed the average yield marginally higher by 13 basis points to 18.12%.
Analysts expect rates to stabilise near current levels in the coming days, barring any major funding injections or outflows.
