Decline in interbank rates expected on liquidity boost

THERE are expectations of ease in the financial system liquidity to be sustained with resultant decline in interbank rates.

This is due to the Federation Account Allocation Committee (FAAC) injections that might likely come during the week, as well as maturing treasury bills.

This week, dealers said the Central Bank of Nigeria (CBN) will sell T-bills amounting to N178.41 billion via the Primary market; viz: 91-day bills worth N5.85 billion, 182-day bills worth N26.60 billion and 364-day bills worth N145.96 billion which will partly offset the maturing treasury bills worth N608.60 billion.

“We expect stop rates for 91-day and 182-day to remain flat while 364-day stop rate to rise slightly. Also, we feel CBN is poised to mop up, via OMO sales, excess liquidity from FAAC injections that might likely come during the week,” dealers from Cowry Assets Management Limited said.

Although for the third time in a row,  FAAC meeting was deadlocked as state commissioners for finance rejected the revenue put on the table by revenue agencies last week, it is expected that the funds may be distributed before the end of the week.

Chairman of the Forum of Commissioners of Finance, Alhaji Mahmood Yunusa, told journalists that his colleagues had decided not accept the May revenue until a clear system for determining federation revenue was put in place.