Scarcity of funds worsens as interbank liquidity falls 72% -GCFRNG

Scarcity of funds worsens as interbank liquidity falls 72% -GCFRNG

The shortage of funds in the interbank money market worsened last week after a sharp drop of 72% in market liquidity to 56.3 billion naira.

Financial Vanguard’s analysis of data from the Central Bank of Nigeria, CBN, showed that the amount of liquidity (opening balance) dropped to N56.3 billion on Friday of last week from N200.64 billion on Friday of the week before, which translates to 72 percent of the week. -in the week (w / w) decline.

The sharp decline was compounded by a significant exit from the market, namely naira 67.59 billion through CBN’s auction of Treasury bills from open market operations (OMO) on Wednesday, and naira 192.76 billion to through the FGN bond auction conducted by the Debt Management Office (DMO) during the week.

The exit moderated the impact of the inflow of N 85 billion through OMO treasury bills due during the week.

Consequently, the cost of funds remained high in the interbank money market, with a marginal decline compared to the previous week.

Data from FMDQ showed that the interest rate on guaranteed loans (Open Buy Back, OBB) fell 50 basis points (pbts) to 19% last week from 19.5% the previous week.

Similarly, the interest rate on overnight loans fell 75 bp to 19.25 percent from 20 percent the previous week.

Also reflecting the intense shortage of funds in the market, the banks’ dependence on the CBN Permanent Credit Line, for their liquidity needs, skyrocketed by 808 percent, as banks borrowed N107.67 billion. from the main bank last week, compared to N11. .84 billion the week before.

On the other hand, the amount of idle funds deposited by banks in the CBN Permanent Deposit Facility collapsed 74 percent to N16.25 percent last week from N63.11 billion the previous week.

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Scarcity of funds worsens as interbank liquidity falls 72% -GCFRNG

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