BY BONNY AMADI
Nigerian money market is set to receive boost in the new week as hitherto tight liquidity eases with the expected influx of funds from the N325.88 billion Treasury Bills set to mature in the week.
In the week, the market is set to receive a boost in system liquidity, as N326.88 billion in Treasury Bills maturities are expected to hit the system next week.
This significant injection is likely to ease short-term funding constraints, providing relief to banks and potentially dragging down interbank funding rates, including NIBOR, OPR, and O/N rates, in the near term.
Nonetheless, market participants are expected to remain cautious, as sustained tight monetary policy stance and liquidity sterilization measures by the Central Bank of Nigeria (CBN) could continue to weigh on the broader funding environment.
Meanwhile, in the just concluded week, the money market funding Rates Stayed elevated amidst absence of maturities of fixed income instrument.
The Nigerian money market last week remained under liquidity strain, primarily due to the absence of OMO or T-bill maturities, which meant no new liquidity injections into the financial system.
As a result, banks and other financial institutions continued to compete for limited funds, leading to sustained pressure across short-term and interbank funding markets.
Despite the liquidity squeeze, the Overnight Nigerian Interbank Offered Rate (NIBOR) declined slightly by 4bps to close at 32.71%, from 32.75% the previous week, suggesting relatively stable overnight conditions.
However, the strain was more evident on longer tenors, as the 1-month, 3-month, and 6-month NIBOR rose to 27.86% (+22bps), 28.14% (+10bps), and 28.66% (+13bps), respectively. These increases reflect persistent funding pressures across the interbank space.
Similarly, key short-term borrowing benchmarks — the Open Buy Back (OPR) and Overnight (O/N) rates — trended upward.
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