Nigerian interbank overnight rate, which rose to148 percent Monday as banks scramble to muster naira liquidity to cover their positions after participating in the mandatory Central Bank of Nigeria (CBN) open market operation (OMO) bills auction on the day, moderated Tuesday to 120.08 percent.
The rates monitored on the FMDQ platform indicate overnight rate falling by 28.25 percent from 148.33 percent Monday to 120.08 percent Tuesday, just as open buy back (OBB) dipped in tandem from 135 percent Monday to 113 percent Monday, indicating a 21.67 percentage change.
Analysts say OMO bills maturity of N93.74 billion expected to hit the system this week may have been responsible for the falling rates, just as they expect the rates to inch further south in the week due to salaries hitting the system.
The Central Bank had sold a total of N17.99 billion worth of OMO bills Monday after it had earlier mopped up N24.38 billion last Friday.
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Specifically, the CBN sold N58.79 million and 17.93 billion of the 87-day and 192-day bills respectively at the OMO market auction Monday after selling N2.11 billion and 22.27 billion of the 90-day and 202-day bills last Friday
Analysts say the Central Bank of Nigeria (CBN) tightening stance with continued issuance of OMO Securities and a focus on curbing naira liquidity to reduce speculative dollar have been responsible for volatility in rates.
“The current market development indicates that the pressure on naira liquidity in the system, making may be thinning out.
The interbank rate reflects the level of naira cash liquidity in the banking system.