Investigations by Nigerian Tribune revealed that DMBs had carried out these transactions with the apex bank through the Standing Deposit Facility (SDF) worth N431.43 billion which outweighed the Standing Lending Facility (SLF) worth N8.67 billion.
The Standing Deposit Facility provides a window for banks to place their surplus cash with the CBN with at 9 per cent interest rate. On the other hand, SLF is a window through which banks borrow funds from the CBN at 16 per cent to enable them meet their short-term cash needs.
Further checks revealed that as a result of the excess liquidity, Nigerian Interbank Offered Rate (NIBOR) for overnight funds rate moderated to 8.25 per cent (from 8.90 per cent) amid sustained financial liquidity ease.
However, NIBOR for other tenor buckets rose: one month, three months and six months tenor buckets rose when compared week by week (w-o-w) to, 12.06 per cent (from 11.31 per cent), 12.70 per cent (from 12.44 per cent ) and 14.52 per cent (from 13.80 per cent) respectively–suggesting unwillingless of banks to lend to one another.
Elsewhere, the Nigerian Treasury bills True Yields (NITTY) rose for most maturities tracked amid sustained bearish activity due to the continued sell-offs by foreign portfolio investors.
Dealers from Cowry Assets Management Limited said yields on the one month, six months and 12 months maturities increased to 10.34 per cent (from 10.24 per cent), 13.01 per cent (from 12.77 per cent and 12.86 per cent (from 12.76 per cent) respectively; however, yield on 3 months maturity fell to 11.35 per cent (from 11.36 per cent).
Similarly, it is expected that T-bills worth N364.33 billion will mature via the secondary market; hence, Cowry Assets Managers expect renewed ease in the financial system liquidity with resultant moderation in interbank rates.
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