Interbank Interest Rates Moderates amid Sustained Liquidity Ease

May 3, 2017
Interbank Lending Rate

Interbank Interest Rates Moderates amid Sustained Liquidity Ease

By Cowry Asset

Last week, treasury bills worth N195.321 billion matured via primary and secondary market, viz; 182-day bills worth N142.369 billion, 183-day bills worth N4.768 billion, 184-day bills worth N22.715 billion and 185-day bills worth N25.469 billion.

Consequently, in line with our expectations, interbank rates moderated across all the tenor buckets amid improved financial liquidity.

NIBOR for overnight funds, 1 month, 3 months and 6 months fell week-on-week to 5.17% (from 36.71%), 17.71% (from 18.30%), 21.27% (from 21.63%) and 23.01% (from 23.25%) respectively. Elsewhere, NITTY fell across most of the maturities amid bargain hunting – yields on 1 month, 3 months and 12 months maturities fell week-on-week to 15.12% (from 16.49%), 18.52% (from 18.65%) and 22.41% (from 22.65%) respectively. However, the yield on 6 months maturities rose to 19.94% (from 19.00%). Meanwhile, March 2017 FAAC allocations worth N467.8 billion were disbursed on Thursday, 27 April 2017 (N38.7 billion higher than N429.1billion.

This week, there will be treasury bills auctions on Wednesday, 03 May 2017, via primary market, viz: 91-day bills worth N45.177billion, 182-day bills worth N23.432billion and 364-day bills worth N82 billion which will be more than offset by maturing treasury bills worth N208.808 billion via primary and secondary market, viz; 91-day bills worth N45.177billion, 182-day bills worth N18.653 billion, 364-day bills worth N82 billion and 279-day bills worth N62.977billion. Hence, with the net inflow from maturing treasury bills and FAAC inflows expected to settle in this week, we expect downward pressure on the interbank rates.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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