Skip to main content

Cost of funds to decline as N311.38bn hit interbank market

Cost of funds to decline as N311.38bn hit interbank market

By Babajide Komolafe

interbank

THE inflow of N311.38 billion into the interbank money market this week is expected to prompt a decline in cost of funds in contrast to the sharp increase recorded last week.

Cost of funds rose by over 1,800 basis (bpts) last week following sharp decline in market liquidity to N550 billion on Friday from over N1 trillion on Thursday. The decline in market liquidity was caused by outflow on Friday for FGN bond purchase (N156 billion), and secondary market (Open Market Operations, OBB) treasuring bills purchase of N122.65 billion.

READ ALSO:CRR increase costs investors N924bn in three weeks

Consequently, interest rate on Collateralised (Open Buy Back, OBB) lending spiked by 1,833 bpts to 20.33 percent on Friday from two percent the previous week. Similarly, interest rate on Overnight lending rose sharply by 1,883 bpts to 21.08 percent from 2.25 percent the previous week.

Analysts projected that this trend will be reversed this week due to inflow of N311.38 billion comprising N131.18 billion worth of maturing primary market TBs, N30.66 billion worth of maturing OMO TBs and N149.14 billion from bond coupon payment. The inflow is expected to cancel out the effect of outflow of N131.58 billion through primary market TB auction by the CBN during the week.

In their projection for the week, analysts at Cordros Securities Limited said: “In the coming week, inflows worth a combined NGN179.80 billion are expected in the system from OMO maturities (NGN30.66 billion) and FGN bond coupon payments (NGN149.14 billion). Barring any significant mop-up by the CBN, we expect the OVN to remain depressed.”

Analysts at Cowry Assets Management Limited similarly said: “In the new week, T-bills worth N162.19 billion will mature via the primary and secondary markets which will more than offset T-bills worth N131.53 billion to be auctioned by CBN via the primary market; viz: 91-day bills worth N49.84 billion, 182-day bills worth N10.62 billion and 364-day bills worth N71.07 billion. Hence, we expect the stop rates to decline amid demand pressure.”

On their part, analysts at Afrinvest Limited said: “In the coming week, we expect inflows from OMO maturities worth N30.7bn. Also, we envisage that system liquidity will remain elevated, driving rates lower in the secondary T-Bills market.”

The post Cost of funds to decline as N311.38bn hit interbank market appeared first on Vanguard News.


https://ift.tt/2VZZ81n by Urowayino Jeremiah via Vanguard News Albert Einstein Fools of Fortune
Labels:

Comments

Post a Comment

Popular posts from this blog

How to jump-start Nigeria economy post-COVID-19 Pandemic

Nwali Tochukwu Watching with consternation the fall out of events, actions, and inactions of our Nigerian leaders on mitigating the negative impact of COVID-19 Pandemic disruptions on our social and economic lives. As a young dynamic business and entrepreneurship writer, and author cum small business owner, what came into my mind as we navigate the storms of COVID-19, was a common English phrase Adages, Proverbs, first recorded in Fuller’s Gnomologia, 1732: ‘A stitch in time saves nine’ which was translated to literally, solve the problems right now! Why procrastinating? If we, as a nation wants to break away from past mistakes, and present mistakes, we should hold the bull by the horn right now. And avoid the roads of political expediency. That is exactly what the stitch in time simply stood for. Promptly address issues posed by Coronavirus. By quickly sewing up of a small hole or tear in a piece of material, so saving the need for more stitching at a later date when the whole ha...
2 comments
Read more

Where is Aguleri Located?

Aguleri is a prominent town often associated with the mighty river called Omabala wgiyflows through it. It is home to a lot of great men and women of Anambra Stare - notably Willie Obiano. History had it that it was the cradle of Igbo people established by Eri, son of Had, son of Jacob (you got to read your Bible babe). Where is Aguleri located? It can be foueat the north eastern part of Nigeria. They share boundaries with Kano, Umueri, Anam and Nando httpss://twitter.com/share https://google.com https://www.alexa.com/siteinfo/google.com https://www.quantcast.com/google.com https://sharedcount.com/?url=https://google.com https://www.similarsites.com/site/google.com https://facebook.com https://www.alexa.com/siteinfo/facebook.com https://www.quantcast.com/facebook.com https://sharedcount.com/?url=https://facebook.com https://www.similarsites.com/site/facebook.com https://youtube.com https://www.alexa.com/siteinfo/youtube.com https://www.quantcast.com/youtube.com ...
Post a Comment
Read more

Forum of retired Heads of Service, Permanent Secretaries donate N500,000 to Edo COVID-19 fund

Urges residents to complement govt’s efforts to check spread The Edo Forum of Retired Heads of Service and Permanent Secretaries has donated N500,000 to boost the Edo State Government’s response to check the spread of coronavirus disease (COVID-19) in the state. Chairman of the forum, Mallam Ikhelowa Atalasa Hanson, who made the presentation at Government House, Benin City, said the donation will complement the state government’s effort in deploying resources to fight against the spread of the virus. Ikhelowa said as a body, the retired heads of service and permanent secretaries tasked themselves to support the state government’s unalloyed commitment to protecting Edo people. READ ALSO:  COVID-19: Edo records 60 new cases as govt calls for caution On his part, Vice Chairman of the forum, Sir Xerxes Usiobaifo urged residents in the state to comply with all regulations from Nigeria Centre for Disease Control (NCDC) and the state government, noting that COVID-19 is real. He ur...
Post a Comment
Read more