N325bn govt securities to moderate inter-bank rate this week

The Nigeria Inter-Bank Offer Rates (NIBOR) is expected to moderate this week following maturities of about N325 billion government securities which is expected to hit the system, Sewa Wusu, head of research, Sterling Capital, has said.

He told BusinessDay in a text message that the Central Bank of Nigeria (CBN) will also drain liquidity through T-bills auction of N138 billion this week.

Money market yesterday experienced liquidity squeeze as NIBOR increased across tenor buckets. For instance, call tenor increased to 12.45 percent from 10.58 percent on Friday. Similarly, 7 days tenor and 30 days tenor climbed to 12.70 percent and 12.87 percent from 12.87 percent and 11.12 percent, respectively, on Friday.

Edgar Ebinum, analyst at Cowry Asset Management Limited, told BusinessDay in a text message that NIBOR climbed up on relative liquidity squeeze as deposit money banks switch funds to cover forex purchases without any major inflow. According to Sewa the increase in NIBOR was induced by liquidity tightness.