Cost of funds declines as N452bn inflow aggravates excess liquidity

THE downward trend in interbank interest rates will persist this week, as inflow of N452 billion aggravates the prevailing excess liquidity in the interbank money market.

Last week, efforts by the Central Bank of Nigeria, CBN, to mop up excess liquidity in the interbank market via N600 billion Open Market Operation (OMO), treasury bills (TBs) offer proved ineffective, as the offer recorded 50 percent patronage of N300 billion.

This was in addition to N216 billion worth of fresh TBs sold by the CBN in a primary market auction, and resulted into outflow of N579 billion from the market. The effect of the outflow was, however, subdued by inflow of N899 billion comprising N360 billion inflow from statutory allocation funds to the three tiers of government, and N539 billion inflow from matured OMO bills.

Vanguard, August 6, 2018

 

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