NIBOR Drops amid Increased Financial System Liquidity

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At the close of the trading week, CBN sold treasury bills worth N199.60 billion in the Secondary Market.

The total outflows were offset by the inflows from the matured T-bills
worth N397.72 billion.

Consequently, NIBOR moderated for all the tenor buckets tracked as the financial system was awashed with liquidity, in line with our expectation: NIBOR for overnight funds, 1 month, 3 months and 6 months moderated to 6.29% (from 7.00%), 12.09%
(from 12.12%), 13.88% (from 14.27%) and
14.44% (from 14.85%) respectively.

Meanwhile, NITTY moved in different directions across maturities tracked:
yields on 1 month and 3 months maturities increased to 11.52% (from 10.95%) and 13.41% (from 13.30%)
respectively; however, yields for 6 months and 12 months maturities moderated to 13.66% (from 13.68%) and
16.73% (from 16.82%) respectively.

In the new week, T-bills worth N594.36 billion will mature via the primary and secondary markets which will more
than offset T-bills worth N150.60 billion to be auctioned by CBN via the primary market; viz: 91-day bills worth
N22.73 billion, 182-day bills worth N24.80 billion and 364-day bills worth N10.07 billion.

Hence, we expect liquidity ease in the finanical system to be sustained with resultant moderation in interbank rates. Also, we expect stop rates to further increase, given the CBN’s signal to use OMO rates to slowdown foreign portfolio outflows.

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Joseph Afam (Local Contents and Partnership Editor) (070 3949 0464) Joseph Afam is a energy and finance journalist, who has years of experience in journalism, he started his journalism career in Nigeria’s top financial newspaper in Lagos. He’s a graduate of Economics and Finance from University of Ebonyi State, Nigeria He has won series of awards and regconitions Contact him for any editorial deals and advertorial issues on # Joseph.Afam@naija247news.com, editor@naija247news.com, Cell: 070 3949 0464

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