NIBOR, NITTY Moderate amid Renewed Liquidity Ease…

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In the just concluded week, in the absence of auctions by CBN both in the primary and secondary markets, we saw interbank rates moderate amid renewed ease in financial system liquidity as bills worth N16.37 billion matured in Open Market Operations (OMO) and as N679.69 billion was disbursed by Federation Accounts Allocation Committee (FAAC).

Hence, overnight funds, NIBOR for 1 month, 3 months and 6 months tenure buckets moderated to 5.00% (from 9.79%), 11.62% (from 12.21%), 12.63% (from 12.69%) and 13.54% (from 14.23%) respectively.

Elsewhere, NITTY contracted for most maturities tracked amid renewed demand pressure – yields on 1 month, 6 months and 12 months maturities fell to 10.42% (from 11.03%), 12.52% (from 12.65%) and 13.33% (from 13.67%) respectively.

However, NITTY for 3 months Increased to 11.63% (from 11.05%). In the new week, CBN will auction T-bills worth N143.96 billion, viz: 91-day bills worth N20.09 billion, 182-day bills worth N24.51 billion and 364-day bills worth N99.36 billion.

We expect their stop rates to increase marginally, given the closeness of the rates to inflation rate. We also expect NIBOR to fall amid maturing N188.64 billion T-bills and increased liquidity from FAAC recent inflows.

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