CBN TO INTENSIFY LIQUIDITY MOP UP AS INTERBANK RECEIVES N552BN INFLOW

The Central Bank of Nigeria (CBN) is expected to intensify efforts to mop up liquidity from the banking system this week in response to inflow of N552 billion from matured treasury bills (TBs). 

Last week, the apex bank issued secondary market (Open Market Operations, OMO) TBs to mop up N316.23 billion from the interbank money market following the inflow of N375.98 billion from matured TBs. 

Consequently, the impact of the inflow on cost of funds was muted as average short term interest rate rose marginally by 17 basis points (bpts). 

According to FMDQ, interest rate on Collateralised (Open Buy Back, OBB) lending increased marginally by 17 basis bpts to 4.25 percent on Friday, from 4.08 percent the previous week, while interest rate on Overnight lending increased by the same margin to 5.0 percent last week from 4.83 percent the previous week. 

This week, the market will experience outflow of N128.24 billion for purchase of primary market TBs to be issued by the CBN. 

The primary market TBs to be auction comprise: 91-day bills worth N3.38 billion, 182-day bills worth N16.92 billion and 364-day bills worth N107.94 billion. On the other hand, the market will experience inflow of N552.07 billion from matured TBs, translating to excess liquidity of N423.83 billion.

(Vanguard)